This video will first explain what capital expenditures and operating expenditures mean, talk about the difference between these two terms and then provide examples of capital expenditures and operating expenditures. CapEx is the short form for capital expenditures and OpEx is the short form for operating expenditures. Capital expenditures are when a company buys assets that add value to the business. Examples would be things like purchasing equipment, buying property and building a factory on it and many more. Operating expenditures is when businesses pay to maintain operations. Examples of operating expenditures would be paying employee wages, paying utility bills and much more. Operating expenditures are day to day expenses wheras capital expenditures are when companies spend money that will lead to future benefit.
The capital expenditures number is used in the crucial metric called Free Cash Flow. Click here to watch our video on Free Cash Flow
The operating expenditures figure is used in the net income figure.
Net Income = Revenue – Expenses and since operating expenditures (otherwise known as operating expenses) is a type of regular expense, it is factored in this calculating and falls under expenses. There are many numbers that contribute to expenses and operating expenses is one of these numbers.
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Cool stuff !
Well explained
Liked & subscribed 👍
Nice explanation, but please work on that intro music
Fácil sencillo
Y le.entendi más en cámara lenta
Nice video man, thank you
COGS are not OPEX as far as I know.
soooo fuckiinng goood ty <33333
Why is ur head going back and forth…lol you should watch yourself…lol
Cool,
good stuff dude, u explained it in a simple, clear, and effective way.
Please keep it up.
Regards,
Ahmad,
This is perfect mate thanks very much!!!
What about SG&A Are they not OpEx? The other question I have is on how to calculate unfunded CAPEX?
I don't speak much English and thanks for talking like that, people like me understand what you say, good job!! Greetings from Argentina!!
how big is your mouth ……iwas just watching it irrtating explanation change your style
The way he speaks is irritating and his tooth is driving me crazy
Damn it I couldn't pay attention to whatever he said but I remember I was looking for an explanation for ' capital expenditure '
man if u always open ur mouth like tat u ill have to go through cough and cold 😛
Thanks man just what i needed!
useful information… like that!
Excellent overview in plain and quick english. Made my day, I can now shoot from the hips if need be !
Swagggyy! Let's not forget the 5 ways to evaluate CAP EX: 1. Payback Period 2. NPV 3. Internal Rate of Return 4. Profitability Index 5. Average Accounting Period
Thanks for the video very easy to understand and good examples thanks!
Lol
Good Video 🙂
Thank you I appreciate it. Unfortunately, I don't think I will make a video on Operating Working Capital because this series is about the metrics and theories I use; and I don't use (or see any point in) the Operating Working Capital. I feel working capital ratio (or current ratio) is accurate; and if I want to know more about these assets I usually look at what the breakdown is (with primarily cash in mind).
I appreciate the request, but it is very unlikely that we will make an OWC video.