Capital Expenditure (CAPEX)
Proxy: Capital Expenditure (Total Fixed Asset Purchases)
Definition & Description
Capital Expenditure (CAPEX) is the funds invested by a company to acquire, maintain, or upgrade long-term physical assets (e.g., plants, machinery, buildings).
How to Use (Panel Data)
Essential for research related to investment decisions, Free Cash Flow, and future growth prospects.
Full Explanation Article
Firms in high-growth phases allocate operating cash flows to massive CAPEX.
A significant drop in CAPEX may indicate a mature phase (cash cow) or liquidity restructuring.
Related Reference Journals
- [1]Fazzari, S., Hubbard, R. G., & Petersen, B. C. (1988). Financing Constraints and Corporate Investment.
- [2]Richardson, S. (2006). Over-investment of free cash flow.
Research Ideas
The Relationship between Operating Cash Flow, Free Cash Flow, and CAPEX Decisions.
Impact of Over-investment (Excess CAPEX) on Firm Value (Tobin's Q).
Frequently Asked Questions (FAQ)
What is the difference between this proxy and regular accounting variables?
For detailed information about this proxy, please refer to the article above. NgepetData can automatically extract the required data from your PDF Annual Report.
Where does the data come from to calculate this proxy?
For detailed information about this proxy, please refer to the article above. NgepetData can automatically extract the required data from your PDF Annual Report.
Can this proxy be used for all industry sectors?
For detailed information about this proxy, please refer to the article above. NgepetData can automatically extract the required data from your PDF Annual Report.