Overview

Capital expenditure (CapEx) is the amount of money invested by a business in the acquisition, maintenance, and improvement of fixed assets such as property, plant, and equipment (PP&E). CapEx is included in the investing cash flow section of a company's cash flow statement, which can be calculated using items from the income statement and balance sheet. The formula for calculating CapEx is:

CapEx = Ending Balance of PP&E - Opening Balance of PP&E + Depreciation

Where the ending balance and opening balance of PP&E can be found in the balance sheet, and the depreciation expense can be found on the income statement.

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