Capital spending refers to the expenditure incurred by a company or government on long-term assets such as buildings, machinery, equipment and infrastructure. It is also known as capital expenditure or capex. The purpose of this type of spending is to acquire, upgrade or maintain physical assets that are expected to provide future benefits for the organization. Capital spending can be used to increase efficiency, productivity, and competitiveness in the marketplace. It is usually financed through borrowing, issuance of debt or equity, or from retained earnings. The amount of capital spending a company engages in depends on its growth strategy, financial resources, and investment opportunities available.