What is the CAPEX and why is such an important magnitude for SMEs?

The Capex, which translates as Capital Expenditure is the expense that a company performs in equipment that generates profits for a company, either through the acquisition of new assets, either through an increase in the value to existing fixed assets.

In a way, the CAPEX box is a company dedicated to maintaining its fixed assets in production conditions and stable operation, which in turn serves to keep running a particular business. For example, buying new computers, new plants or new delivery trucks are clear examples of CAPEX.

In accounting terms, the expenses necessary to undertake all of these investments are capitalized if they help to increase the useful value of the asset in question, and the company must distribute this capitalized expenditure between its lifetime (i.e. must be written off). If, on the other hand, spending only serves to keep the asset in its current condition, the expense is not capitalized and therefore is considered as a deductible expense.

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