OpEx vs CapEx

Operating vs Capital Expenses

In one sentenceOpEx is the everyday cost of running the business (salaries, rent, software); CapEx is spending on long-lasting assets (equipment, buildings).

What it means

Operating expenses hit the P&L in the period they happen. Capital expenses are spread out over the asset's useful life through depreciation, which is one reason EBITDA adds depreciation back.

How to use it

• Treat software subscriptions and AI tools as OpEx to review regularly; cut what you do not use.

Related terms

COGS EBITDA P&L