Capex is a shortened form of the term capital expenditure or capital expenditures. Capex is often used when referring to:
- the actual amounts that were spent during a recent accounting period for additions to property, plant and equipment, and/or
- the planned amounts that will be spent for future additions to property, plant and equipment
The total capex amount that was spent in a recent accounting period is reported in the statement of cash flows within the section described as investing activities. Since the capex amount is an outflow of cash, it is reported as a negative amount.
The planned capex amounts will likely be contained in a company's internal document referred to as the capital expenditures budget (or capex budget).
Many financial analysts also subtract the capex amount from the company's cash from operating activities to arrive at the company's free cash flow.
Most of the capex items will be depreciated over the years of their useful life. This means the capex amount will likely be spread over many income statements in the form of Depreciation Expense and/or as part of a manufacturer's cost of goods sold.
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