Can you tell me the difference between operations and capital?

Question

Chicago Transit Authority budget in Springfield, IL

Answer 1

A capital budget is generally money to be spent on infrastructure - basically one-time improvememts.

An operating budget shows the expenses of running the business for the year.

Answer 2

Difference can be interpreted this way -

operating expense will be expensed in the year that is incurred while capital expenditure can be expensed over a period of year ( i.e. 10 years).

Hence if an expense is treated as capital then its impact on the bottom line is minimal as opposed to operating expense.

Answer 3

Capital (owners equity) is liquid while the assets are solid.Equity value is variable day to day while the value of assets appreciate or depreciate in a long time span.