Capital expenditure (Capex)

Capex is short for capital expenditure. This is simply thepurchase of fixed assets such as land, buildings and equipmentfor a business and it is often one of the biggest uses for acompany's cash flow. Capex is usually split into two parts.

Maintenance capex refers to the money that is spent onreplacing worn out assets or bringing existing ones up to date.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

The keypoint about capex is that a company has to get a good returnon the money it spends. Spending too much capex on poorprojects that deliver weak returns

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.