Capital expenditures (CapEx) are funds that a company spends on the acquisition, improvement, or replacement of fixed assets, such as property, plant, and equipment (PP&E). Capital expenditures are typically recorded on a company's balance sheet as an asset, rather than as an expense.

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Capital expenditures can include a wide range of expenditures, from the purchase of new equipment to the construction of a new building. These expenditures are typically significant and are intended to benefit the company over the long term.

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One important aspect of capital expenditures is their impact on a company's cash flow. While capital expenditures can improve a company's operations and financial position over the long term, they can also require a significant amount of cash to be paid out up front. As a result, companies must carefully manage their capital expenditures to ensure that they have the funds they need to operate and grow their business, while also maintaining financial stability.

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Capital expenditures are an important component of a company's financial position and reflect its investment in long-term assets. By carefully managing their capital expenditures, companies can improve their operations and financial position over the long term, while also maintaining strong cash flow and financial stability.

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