Capital Expenditure, often abbreviated as CapEx, refers to the funds that a business uses to acquire, upgrade, or maintain physical assets such as buildings, machinery, and equipment. These expenditures are essential for a company to grow and improve its operations. For example, when a company like Apple invests in new manufacturing equipment, it is making a capital expenditure that will help increase production efficiency. Unlike regular operating expenses, which cover day-to-day costs, capital expenditures are typically long-term investments. They are recorded on the balance sheet and depreciated over time. This means that the costs are spread out over the useful life of the asset, allowing companies to manage their finances more effectively while planning for future growth.