Capital Expenditure (CapEx) is the money spent by a company to acquire, upgrade, or maintain long-term assets like buildings, machinery, or equipment.
CapEx refers to investments made to increase a company’s future earning capacity. These expenses are not fully deducted in one year but are spread over time through depreciation.
CapEx is crucial for business growth as it helps in expansion, modernization, and efficiency improvement.
"If a company spends ₹50 lakh to buy new machinery, it is considered capital expenditure and will be depreciated over its useful life."