Final answer:
The appropriate number to use for capital expenditures on a company's financial statements is listed on the cash flow statement under new property, plant, and equipment, which reflects actual investment in physical assets for a specific period.
Step-by-step explanation:
To find a number that corresponds to capital expenditures in a company's financial statements, it would be most appropriate to look on the cash flow statement for new property, plant, and equipment. Capital expenditures represent funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment. This is reflected in the cash flow from investing activities section of the cash flow statement, which includes outflows for investments in physical assets. It is important to distinguish these expenditures from the figures listed on the balance sheet for property, plant, and equipment, as these represent the cumulative value of the company's assets rather than the actual spending done within a specific period.
Investment expenditure is categorized into spending on new capital goods such as producer's durable equipment and software, nonresidential structures like factories and offices, changes in inventories, and residential structures. These investments are typically made by businesses, except for residential structures, which are made by households. Money, while not considered capital, can be used to acquire these physical assets and is considered a form of financial capital.
When a firm invests in capital goods, they do so with the expectation of earning future profits. A company may raise financial capital for its investment expenditures through early-stage investors, reinvesting profits, borrowing, or selling stock. Investment in physical assets is vital for sustaining economic growth, as shown by the resilient business investments despite economic downturns.