CapEx (Capital Expenditure)
Funds spent by a company to acquire, upgrade, or maintain physical assets such as property, plants, equipment, or technology. Contrasts with OpEx (operational expenditure) for day-to-day running costs.
Biological Context
CapEx parallels the biological distinction between building structures and maintaining them. Growing a new limb is capital investment; keeping it functioning is operational cost. Organisms must balance structural investment against immediate metabolic needs.
Business Application
CapEx decisions are strategic: they commit resources to particular capabilities for years. High CapEx businesses (manufacturing, infrastructure) have different dynamics than low CapEx businesses (software, services). CapEx creates operating leverage—fixed costs that amplify both profits and losses.