{"id":10895,"date":"2023-01-17T21:13:48","date_gmt":"2023-01-17T15:43:48","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=10895"},"modified":"2023-05-30T12:41:03","modified_gmt":"2023-05-30T07:11:03","slug":"capital-expenditure","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/","title":{"rendered":"Word of the Week &#8211; Capital Expenditure"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69db102384008\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69db102384008\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/#What_is_Capital_Expenditure\" >What is Capital Expenditure?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/#How_Does_Capital_Expenditure_Work\" >How Does Capital Expenditure Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/#Capital_Expenditure_Formula\" >Capital Expenditure Formula<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/#The_Bottom_Line\" >The Bottom Line<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/#FAQs\" >FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/#What_are_examples_of_capital_expenditure\" >What are examples of capital expenditure?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/#What_is_capital_expenditure_and_what_is_operating_expenditure\" >What is capital expenditure and what is operating expenditure?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/capital-expenditure\/#Is_capital_expenditure_an_expense\" >Is capital expenditure an expense?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Capital_Expenditure\"><\/span><b>What is Capital Expenditure?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Capital Expenditure (CapEx) is the amount of money that a business spends on buying and maintaining any machines, tools, or patents that help in running its operations.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_Does_Capital_Expenditure_Work\"><\/span>How Does Capital Expenditure Work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><span style=\"font-weight: 400;\">CapEx is calculated by adding all changes to capital assets and then adding the depreciation to that total amount.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">CapEx is important to stakeholders of a business because it gives valuable insight into <\/span><b>how much money is being spent on the future functioning of the business<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The &#8220;right&#8221; amount of money being spent as Capital Expenditures varies across industries. <\/span><\/li>\n<li><span style=\"font-weight: 400;\">Capital-intensive businesses like mining and manufacturing businesses might spend a lot more on CapEx than IT or e-commerce businesses. <\/span><\/li>\n<li><span style=\"font-weight: 400;\">No business can completely avoid spending this money.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Capital_Expenditure_Formula\"><\/span>Capital Expenditure Formula<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Capital Expenditure = Change in Property, Plant and Equipment + Current Depreciation<\/p>\n<p><strong>Read more: <a href=\"https:\/\/razorpay.com\/blog\/business-banking\/depreciation\/\">What is Depreciation?<\/a><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_Bottom_Line\"><\/span><strong>The Bottom Line<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Along with strong financials, businesses need solid financial support for growth. RazorpayX is built for the needs of businesses today.<\/p>\n<p><span style=\"font-weight: 400;\">This one-stop banking solutions platform allows business owners to open current accounts, <a href=\"https:\/\/razorpay.com\/x\/tax-payments\/\">pay taxes<\/a>, schedule payments, <a href=\"https:\/\/razorpay.com\/x\/vendor-payments\/\">pay vendors<\/a> seamlessly and check invoices from a single dashboard.<\/span><\/p>\n<p>&nbsp;<\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x?r=blog_cta_business_banking_capital_expenditure&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Explore RazorpayX<\/a><\/div>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div id=\"rank-math-rich-snippet-wrapper\"><div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-1\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_are_examples_of_capital_expenditure\"><\/span>What are examples of capital expenditure?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Capital expenditure includes money spent on the purchase or maintenance of capital assets. Some examples are: buying land, repairing machines, etc.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-2\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_capital_expenditure_and_what_is_operating_expenditure\"><\/span>What is capital expenditure and what is operating expenditure?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Capital expenditures include money spent on assets that will last for longer than one accounting year. Operating expenditure is money spent on assets that will only serve the business for one accounting year. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-3\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Is_capital_expenditure_an_expense\"><\/span>Is capital expenditure an expense?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Capital expenditure is not considered an expense to the business; it is considered an investment since it is towards the future functioning of the business. <\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is Capital Expenditure? Capital Expenditure (CapEx) is the amount of money that a business spends on buying and maintaining any machines, tools, or patents that help in running its operations.\u00a0 How Does Capital Expenditure Work? CapEx is calculated by adding all changes to capital assets and then adding the depreciation to that total amount.<\/p>\n","protected":false},"author":106,"featured_media":11668,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[408,402],"class_list":{"0":"post-10895","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking","8":"tag-capital-expenditure","9":"tag-word-of-the-week"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10895","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/106"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=10895"}],"version-history":[{"count":0,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10895\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/11668"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=10895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=10895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=10895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}