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CapEx Vs OpEx?
Simple Terms
CapEx (capital expenditures) tend to be major investments for
large projects, paid for up-front with cash, which show up on the
balance sheet and are depreciated over the life of the asset.
OpEx (operating expenditure) shows up on the profit and loss
statement and is the expense incurred on an ongoing, as-needed
basis.
Most Popular
CapEx is more restrictive and limited. Organizations usually want to
direct their cash toward revenue-generating activities. This is why many
organizations prefer to lease rather than purchase — they don’t want to tie
up precious capital. The more consistent and predictable OpEx is usually
more attractive to the CxO.
