After studying this chapter, you should be able to:
Investments in long-lived assets, such as property, plant, and equipment, are important elements in many companies' statements of financial position. Along with research and development, these investments are the driving force for many companies in generating cash flows. Property, plant, and equipment information reported on a company's statement of financial position directly affects such items as total assets, depreciation expense, cash flows, and net income. As a result, companies are careful regarding their spending level for capital expenditures.
To provide some insight into the magnitude of these expenditures, Table 1 identifies the 10 global companies with the largest capital expenditures in a recent year.