Formula and Calculation of CapEx

Capital Expenditure (CapEx) refers to funds used by a company to acquire, upgrade, or maintain physical assets like property, equipment, or infrastructure. The formula to calculate CapEx is: CapEx = PPE (current period) – PPE (prior period) + Depreciation, where PPE stands for Property, Plant, and Equipment. This helps businesses assess their investment in long-term assets necessary for growth and operations.