Cash Flow

Capital Expenditure (CapEx)

Cash spent on property, plant, and equipment.

Definition

Capital expenditure is the cash a company spends to acquire, upgrade, or maintain physical assets like buildings, equipment, and infrastructure. Distinguished into 'maintenance capex' (keeping current operations running) and 'growth capex' (expanding capacity).

Why it matters

Capex intensity defines the business model. Software businesses spend 1–3% of revenue on capex; railroads and utilities spend 15–20%+. High capex intensity is fine if returns on that capex are high — and a problem if not.

How Standard Equity uses it

Used to compute free cash flow (operating cash flow − capex), which feeds every FCF figure in the report.

The metric

CategoryCash Flow
Unit$M
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