Key Points About Operating and Capital Expenditures

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Operating expenses (OPEX) are the funds that a company spends to support its core business. This includes salaries, purchasing materials, logistics, and rent.
Capital expenditures (CAPEX) are funds spent on purchasing fixed assets: real estate, vehicles, land or equipment.
It is necessary to control and analyze OPEX and CAPEX so that the business does not waste money and increases the efficiency of its work, and therefore profit.
If a company's OPEX is very high, it can be reduced and, consequently, profits can be increased by transferring some of the costs to CAPEX. For example, if a company has a stable flow of customers and poland telegram data established production processes, it is more profitable to buy its own equipment rather than rent it. For new companies, on the contrary, it is much more profitable not to buy their own assets, but to borrow them, so as not to invest too much money at the start.
A gradual decrease in CAPEX can lead to a decrease in profits. For example, if equipment in production has become unusable over time and the company has not replaced it in time, this will lead to a decrease in productivity.
Analysis of OPEX and CAPEX distribution is important for understanding the company's cost structure, effective financial control and regulation.