1. What is Capex?

Capital Expenditure (Capex) refers to funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. It represents money invested to purchase or improve fixed assets.

2. How Does the Calculator Work?

The calculator uses the simple Capex formula:

Where:

• Purchases of Fixed Assets — Total amount spent on acquiring or upgrading physical assets

Explanation: The calculation simply sums up all expenditures made on fixed assets during a given period.

3. Importance of Capex Calculation

Details: Capex is a crucial metric for investors and analysts as it indicates how much a company is investing in future growth. High Capex may suggest expansion, while low Capex might indicate maintenance mode.

4. Using the Calculator

Tips: Enter the total amount spent on purchases of fixed assets in your local currency. The value must be greater than 0.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between Capex and Opex?
A: Capex refers to capital expenditures for long-term assets, while Opex (operating expenses) are day-to-day expenses for running the business.

Q2: How is Capex treated in financial statements?
A: Capex appears on the cash flow statement and increases assets on the balance sheet. It's depreciated over time rather than expensed immediately.

Q3: What are examples of Capex?
A: Examples include purchasing new machinery, building construction, vehicle purchases, and major software upgrades.

Q4: How often should Capex be calculated?
A: Typically calculated quarterly and annually as part of financial reporting, but can be tracked more frequently for internal management.

Q5: Can Capex be negative?
A: Normally no, unless there are significant asset sales exceeding purchases, which would be unusual.