Capital expenditures (also CAPEX from the English. CAPital EXpenditure ) - capital used by companies to acquire or upgrade physical assets (residential and industrial real estate, equipment, technology).
Often there is such a definition of CAPEX - this is the investment costs for the purchase of fixed assets, as well as the costs of servicing loans for their acquisition.
Enterprise capital expenditures
Capital expenditures represent the investment activity of an enterprise, investments in the purchase of equipment, buildings and structures, construction, etc. Capital expenditures can include everything from replacing glass in the roof to building a completely new factory. In the General case, capital costs are calculated as the growth of fixed assets over time (determined by the balance sheet of the organization). Most enterprises make significant investments in fixed assets, since they create the basis for their activities and make up about 60% of the asset structure.
Bank capital expenditures
Capital expenditures have a completely different meaning for credit organizations. The needs of banks in fixed assets are limited to the purchase of office equipment and building equipment, which are often rented. It becomes clear that investments in fixed assets for enterprises in the financial sector are incomparably small compared with industrial enterprises. The share of fixed assets in the structure of banks' assets, as a rule, does not exceed 3-4%. Insignificant investments in fixed assets for banks should be offset by significant investments in intangible assets: optimization of settlement and management systems, staff training, etc. However, the share of intangible assets in Russian banks is even less than the share of fixed assets and does not exceed 1% of the total assets. Thus, a distinctive feature of enterprises in the financial sector is the very small volume of capital investments.
Sources
- Asvat Damodaran. Investment Valuation: Tools and methods for valuing any assets = Investment valuation. Tools and techniques for determining the value of any asset. - M .: "Alpina Publishers" , 2010. - S. 1338. - ISBN 978-5-9614-1152-2 .
See also
- Operating costs
- Total Cost of Ownership