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CapEx Vs OpEx?
Simple Terms
Simply put, capital expenditures (CapEx)tend to be major
investments in goods, which show up on the balance sheet and are
depreciated over the life of the asset, whereas operating
expenditure (OpEx) shows up on the profit and loss account and
relates to expenses incurred on an ongoing basis.
Most Popular
CapEx is limited, especially in these post-GFC times. Therefore,
organisations usually want to direct their investment toward revenue-
generating activities. This is why many organisations prefer to lease rather
than purchase — they don’t want to tie up precious Capital. Also
smoother operational expenditure is usually more attractive to the CxO.
