Metric
Capital Expenditure Ratio
How much of revenue is reinvested into physical assets.
Formula
Capital Expenditures ÷ Revenue
Definition
CapEx ratio shows how much the company spends on long-term assets like equipment, property, or infrastructure for every dollar of revenue.
Why it matters
Low CapEx businesses (like software) keep more cash; high CapEx businesses (like manufacturing) need more to maintain competitiveness. What matters is whether that spend earns good returns.
Building blocks
- Capital Expenditures (CapEx)
- Money spent on long-term assets like equipment or property.
- Revenue
- Total money earned from selling products or services.
Educational information only, not investment advice. Turtleway helps you understand what a metric or concept means; it does not tell you what to buy or sell.