capital budget: meaning, definition, pronunciation and examples

A capital budget plans for long-term asset investments (e.g., buildings, machinery), which provide value over many years. An operating budget plans for day-to-day expenses (e.g., salaries, utilities) incurred in running the business within a single period.

Primarily a noun. The related verb phrase is 'to perform capital budgeting' or simply 'to budget for capital expenditures.' The use of 'capital budget' as a verb (e.g., 'we capital budgeted') is seen in business jargon but is not standard.

It is typically prepared by financial planners, department heads, and controllers, then reviewed by senior management (like the CFO) and finally approved by the board of directors or a similar governing body.

Yes. While the term is corporate, the concept applies to any entity making significant long-term investments. A small business might have a capital budget for a new van, and an individual might create one for a home renovation.

A financial plan that estimates the costs and benefits of long-term investments in assets like buildings, equipment, or technology, and outlines how these investments will be funded.

Capital budget is usually formal, technical in register.

Capital budget: in British English it is pronounced /ˌkæp.ɪ.təl ˈbʌdʒ.ɪt/, and in American English it is pronounced /ˌkæp.ə.t̬əl ˈbʌdʒ.ɪt/. Tap the audio buttons above to hear it.