Capital Expenditures, often abbreviated as CapEx, refer to the funds that a company invests in acquiring, upgrading, or maintaining physical assets such as buildings, machinery, and equipment. These expenditures are essential for a business to grow and improve its operational efficiency. Unlike regular operational costs, CapEx is typically a long-term investment that can provide benefits over several years. Companies usually track CapEx separately from operational expenses to assess their financial health and future growth potential. This distinction helps investors and management understand how much is being spent on long-term assets versus day-to-day operations, influencing strategic planning and budgeting decisions.