What is Capital Expenditure?

Capital Expenditure

accounting

Definition

Spending on long-term assets like property, equipment, and technology that will generate economic benefits over multiple years.

Explanation

Capex is the investment a company makes in its future productive capacity. It appears on the cash flow statement and is distinguished from operating expenses (which are consumed in the current period). Free cash flow = operating cash flow minus capex. Companies with high capex requirements (semiconductors, utilities, telecoms) generate lower free cash flow per dollar of revenue. The capex-to-revenue ratio reveals capital intensity — asset-light software companies may spend 3-5% of revenue on capex, while semiconductor fabs spend 30-40%.

How Stoquity Uses This

Stoquity incorporates capital expenditure analysis across its portfolio management platform, providing real-time monitoring and AI-powered insights for every portfolio.

See This in Action

Explore how capital expenditure applies to real portfolios on Stoquity.

Start Free →