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| Capital Expenditure (Capex) |
Capital Expenditure (Capex) are costs that are used by companies to acquire or increase of fixed assets or physical assets such as property, industrial buildings or equipment.
While in another explanation states that the capital expenditure is the expenditure that can generate profits in the future and will be accounted for as a capital expenditure and not as a cost. In general, every company will allocate capital expenditure in its budget.
Diasatas of simple understanding can be concluded that the capital expenditure is very important for the development and growth of the company. For companies likely always allocates capital expenditure in its budget.
If a company does not allocate CapEx, most likely over time its performance will also drop. For example PT. Banget economy is a company engaged in the leasing of vehicles, and, therefore, the company must allocate the cost to maintain the quality and the rejuvenation of the vehicle so that the vehicle leasing can provide the best service.
If the PT. Banget economy does not allocate costs to preserve the quality and the rejuvenation of the vehicle then surely the leased vehicle has a quality that is not always in good condition so it will be more and our earnings will decrease.
Then from the illustration above we can conclude that CapEx is very influential for a company to maintain or increase profits.Usually budgeted apex of profits generated by the company after that if there are remaining profit will be distributed to shareholders as dividends.
Capex is not necessarily derived from the results of the company's profits or internal funds but can also be funded by other parties such as bank loans, issuance of debt securities, asset securitization, etc.
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