Capital Expenditures %

View Financial Glossary Index

Definition

Capital Expenditures % (capital expenditures percentage or CAPEX) is capital expenditures as a percentage of gross income. Capital expenditures are incurred when a business spends money to purchase fixed assets or to add value to an existing fixed asset. In accounting, a capital expenditures are added to an asset account, thus increasing the value of the asset.

In order to understand the distribution of a company's gross income towards expenses, investors observe the capital expenditures % and other metrics including the interest expense percentages.

Formula

Capital Expenditures % = Capital Expenditures / Gross Income

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