Thank you for the clear explanation. Can I ask you why the outflow of cash for purchase of equipment is called "capital" expenditure? I am confused because "capital" sounds like equity capital which typically is classified as financing cash flow.
Hi there! Long-lived fixed assets, such as equipment, are commonly referred to as “capital.” Just like equity capital, these assets are part of the company’s “capital structure.” The terms equity (for equity capital) and debt (for debt capital) designate those types as financing activities.
Amazing video! I struggled with understanding these sections and you just cleared my confusion in 2 minutes. Thank you!
Thank you sir . Im from indai🎉❤
Thank you very much I found this video very helpful
Thank you for the clear explanation. Can I ask you why the outflow of cash for purchase of equipment is called "capital" expenditure? I am confused because "capital" sounds like equity capital which typically is classified as financing cash flow.
Hi there! Long-lived fixed assets, such as equipment, are commonly referred to as “capital.” Just like equity capital, these assets are part of the company’s “capital structure.” The terms equity (for equity capital) and debt (for debt capital) designate those types as financing activities.