Capex vs Opex: Meaning, Difference & Examples
Definition
Capex (capital expenditure) is money spent on long-term assets such as machinery or buildings; it is capitalised and depreciated. Opex (operating expenditure) is the day-to-day cost of running the business — wages, power, rent — and is charged to profit in the year.
| Term | Capex vs opex |
|---|---|
| In Hindi | पूंजीगत व्यय और परिचालन व्यय |
| Area | Business |
| Search phrase | capex vs opex |
| Try it | Depreciation |
पूंजीगत व्यय और परिचालन व्यय — हिंदी में अर्थ
पूंजीगत व्यय (Capex) मशीन या भवन जैसी लंबी अवधि की संपत्ति पर खर्च है, जिसका मूल्यह्रास होता है। परिचालन व्यय (Opex) रोज़ का खर्च है — वेतन, बिजली, किराया — जो उसी साल के लाभ से घटता है।
Examples in a factory
Capex: a new CNC machine, a shed extension, a forklift, ERP implementation that creates a long-term asset. Opex: raw material, wages, electricity, repairs and maintenance, software subscriptions, consumables.
Why the difference matters
Capex affects the balance sheet and profit only through depreciation over several years; opex reduces profit immediately. Repairs that restore an asset are opex; improvements that extend its life or capacity are capex.
Example
Buying a ₹15 lakh press brake is capex (depreciated over its life); its annual maintenance contract of ₹60,000 is opex.
Related tools and guides
Frequently asked questions
What is the full form of capex and opex?
Capital expenditure and operating expenditure.
Is a cloud ERP subscription capex or opex?
Usually opex — a recurring charge expensed as it is incurred.
Are repairs capex?
Routine repairs are opex. Spending that improves the asset or extends its life is capex.
Which is better, capex or opex?
Neither; capex suits assets used for many years, opex suits flexibility and lower upfront cash.
Related terms
- Incoterms (EXW, FOB, CIF, DDP)Incoterms are standard trade terms published by the International Chamber of Commerce that set out, for a sale of goods, who arranges and pays for transport, insurance and customs, and the point at which risk passes from seller to buyer.
- Letter of credit (LC)A letter of credit (LC) is a bank's written undertaking, issued on behalf of a buyer, to pay the seller a stated amount once the seller presents documents that comply exactly with the LC's terms within the time allowed.
- MSME (Micro, Small and Medium Enterprises)MSME stands for Micro, Small and Medium Enterprises. From 1 April 2025 an enterprise is micro up to ₹2.5 crore investment and ₹10 crore turnover, small up to ₹25 crore and ₹100 crore, and medium up to ₹125 crore and ₹500 crore.