Capital Spend

Formal

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.

Real-world Example

A retailer sets aside $5M in capital spend for the year to open three new stores - money invested in long-term assets rather than day-to-day operating costs.