What are capital expenditures? I have seen this word being thrown around quite frequently over here.?

A.k.a CAPEX.

Essentially, CAPEX:

• it is a payment for goods and services that shows on balance sheet as an investment, instead of income statement as a expenditure
• you can also find it in the Cash Flows From Investing section of the company's cash flow statement
• Note: If an item has a useful life of less than one year, it must be expensed on the income statement rather than capitalized

For eg. A company that is looking to boost its profits and book value will likely look to incur a capital expense by purchasing a new machine rather than leasing one (which would count as an operating expense.

Capex are expenses that are capitalised on the balance sheet as an asset, rather than being shown on the income statement as an expense of the company. Capex are usually expenditure on physical fixed assets such as buildings, equipment, industrial plants and technology.

These assets that end up on the balance sheets are those that have a useful life of more than one year, which means that the company will take more than one year to fully utilise them.

You can get the information on capital expenditures frorm the Cashflow from Investing Activities, or you can also calculate it by taking the difference in Plant, Property & Equipment for a year and adding that year's depreciation.

This metric is often quite useful because it shows you a large cash expenditure that the company makes, which often isn't revealed explicitly on the balance sheet and income statements. The cash outflow here often suggests that the company has less cash to use elsewhere.

Operating Cashflow/Capex is a good way to find out if the company has enough cashflow from operating activities to support their capex, and can be a warning bell. Capex also reduces the Free Cashflow of the company, which is the cash availible to debtors and shareholders, since capex is part of the operating business requirements.