Definition of Capital Expenditures

Capital expenditures refer to funds spent by a company to acquire, upgrade, or extend the life of its tangible assets, such as property, equipment, or infrastructure. These investments are not expensed immediately but are instead recorded as assets on the balance sheet and depreciated over their useful lives. Capital expenditures are crucial for maintaining or expanding a company’s productive capacity and are typically distinguished from operating expenses, which are incurred in day-to-day business activities.