What is capex?

Abbreviation of capital costs CAPEX applies to any capital expenditure used to obtain physical assets. Assets obtained as a result of these capital expenditure may be in the form of assets such as land or buildings, as well as equipment for the office or for the establishment of a production floor. Together with the acquisition of new assets, CAPEX may also be associated with the decision to upgrade the physical assets by improving or otherwise reconstructing a property or equipment.

Understanding the amount of CAPEX, which is involved in obtaining these types of assets or renovation of existing ones, can be very useful if the task requires loans. The creditors often look at the actual amount of the relevant capital costs and also whether the debtor wants to borrow new equipment or upgrade existing assets. Depending on the strategy, the creditor may determine that lending money on upgrading outdated equipment or an attempt at an improlizacivery size that results inThe result of the result of a separate value may be a poor risk. Since this set of circumstances could directly affect the debtor's ability to repay the loan, the creditor may decide to reject the application.

At the same time, the creditor may consider CAPEX an excellent reason to lend money and find the debtor's strategy to include the potential for strengthening the reputation and financial resources of the company as soon as acquisitions or upgrades are completed. In this case, creditors are often willing to expand their loans with very favorable conditions.

When calculating Capex associated with any type of property acquisition or replacement of devices, it is good to ensure that the transaction can pay for a reasonable time. It generally expects investment to increase the productivity of upcoming that allows the same amount of goods to be produced faster or at less expense. In both scenarios this will mean an increase in the gross profit of society, as soon as Capex is settled in full.