Financial Terms Glossary

Capital Spend


Different to 'Operational Spend', this is a commitment to invest in long-term assets and business proposals. Imagine drilling for oil, constructing a new railway, or erecting a building - this is all capital spend - with permanence and longevity, shown 'On Balance Sheet' and clearly employed in running the business on a long-term basis.


There is a clear difference between immediate consumption and long-term investment. Capital Spend is investment by a company in long-term assets and infrastructure, rather than immediate consumption. Elastic bands, pieces of paper, telephone calls are 'consumed', whereas new buildings, network infrastructure, and desks are not. This is spend on assets required to run business.

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