Capital spending (capex)
Cash spent on long-lived things such as buildings, machines and data centers, to keep the business running and growing.
Worked example · a round-number company
Capex$200M÷Revenue$5.0B=Capex / revenue4.0%How to read it
↕Neither higher nor lower is better. High capex can mean investing for growth, or a business that must keep spending just to stand still.
Keep in mind
- Software and acquisitions bought for cash usually aren't in capex.