Full form of CapEx is Capital Expenditure

Capital Expenditure, commonly referred to as CapEx, represents the funds used by a business to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment. This term is predominantly used in financial reporting and analysis, playing a crucial role in a company's financial strategy. CapEx is vital for sustaining and expanding a business's operational capacity. For example, a manufacturing company may invest in new machinery to increase production efficiency, which would be considered a capital expenditure. Unlike operational expenses, which cover the day-to-day costs of running a business, capital expenditures usually involve significant investments that offer benefits over a prolonged period. Understanding CapEx is essential for investors and analysts as it indicates a company's long-term vision and its ability to generate future cash flows.