Capital Expenditures (CAPEX)
capex is short for capital expenditure and refers to a company's spending on physical assets like buildings or equipment. capital expenditures are unusual in that they can not be deducted from income for tax purposes. instead, the value of the capital expenditure is added to the company's assets and the value is reduced every year through depreciation and amortization. capex is an important part of a company's investment spending and cash flow. in many industries, physical assets are essential for the production of goods. a steel company can not manufacture steel without furnaces and so on. every year these companies must spend money to replace or repair old equipment or expand operations with the purchase of new equipment. this spending reduces the cash flow of a company. many investors focus on free cash flow, which is the remaining cash after capital expenditures have been subtracted from the operating cash flow. free cash flow represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base. some investors will avoid industries or companies with high annual capex requirements. investors should follow capex not only to determine if a company is more or less efficient than its rivals but also to determine if a company has been under-investing and could potentially suffer from less efficiency, lower margins and higher future spending requirements.
- capital expenditure（capex）・・・資本支出