Hi all,
What is the difference/relation between "capital expenditure" provided in the annual budget documents and "capital formation" provided by the CSO (Central Statistical Office). While trying to compare, both are not matching even closer. Could someone help on it?
Capex is the ratio of fixed investment and total assets. It is a measure of "tangibility" of the company. Capital formation, when referring to a macroeconomic context, concerns the capital stock of an economy or a specific economic sector, and thus the increase of physical capital during the period.
Capital expenditure is an indication of Capital formation, but not necessarily must the capital formation correspond with the capital expended. capital expenditure may in certain cases not indicate increase in physical capital stock
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