capital spending investment & finance definition
Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years.
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Definition
Capital spending
Money a company spends on purchases or upgrades of property, plants, technology and equipment. Capital spending is a major driver of economic growth behind consumer spending.
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Capital spending. Stocks showing a decrease in capital spending performed twice as well.
Long-term debt. Stocks with no long-term debt underperform those with higher debt 100% of the time.
Most of the stocks in the Household Products Industry, such as Clorox (CLX), have 'cash flow' that exceeds the sum of capital spending and dividends. This is not surprising, considering that this is not a capital-intensive industry.
Economic modeling technique that seeks to explain in mathematical terms the relationships between key economic variables such as capital spending, wages, bank interest rates, population trends, and also government fiscal and monetary policies.
A capital expenditure is also sometimes referred to as capital spending or a capital expense, and many publicly traded companies list their capital expenditures for the year in annual reports, ...
Capital spending varies widely by industry. Power utilities, cable TV firms, heavy manufacturers and the like often have large capital expenditures. Securities firms and software companies, by contrast, depend more on human resources.
While previous presidents have raised taxes, they also streamlined and deregulated industries or provided tax incentives to inspire capital spending to create jobs.
A common element of a Financial plan that describes projected Capital spending and the proposed uses of Net working capital.
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According to analysts' estimates, Big Blue now generates between $6 billion and $7 billion a year, more than enough to meet its capital spending needs.
Why we care: Strength or weakness in corporate profits often foreshadows increases or decreases in the contribution of capital spending to GDP growth.
Orders, Sectoral Production and Inventories
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Operating cash flow
Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements.
Assets requirements
A common element of a financial plan that describes projected capital spending and the proposed uses of net working capital.
Capital Expenditures - Spending by a company on plant and equipment, shown in the consolidated statement of cash flows in the annual report. Also known as capital spending or capital investment.
On the other hand, when interest rates are decreasing, consumers and businesses are more inclined to borrow (because banks ease lending requirements), boosting retail and capital spending, thus helping the economy to grow.
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In a similar vein, Carnival had more than enough cash from operations to fund its dividend, but also had massive capital spending for its cruise ships, which limited its ability to maintain its payout when credit tightened.
 See also: Capital, Market, Stock, Investment, Long
  
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