Investing term

What is Property, plant & equipment (PP&E)?

Long-lived physical assets — buildings, machinery, vehicles — sitting on the balance sheet at cost minus accumulated depreciation.

Property, plant and equipment (PP&E) is a company's long-lived physical assets — buildings, machinery, vehicles, land — carried on the balance sheet at cost minus accumulated depreciation. It shows how capital-intensive a business is: heavy PP&E (factories, utilities) means big ongoing spending to maintain it, while asset-light businesses run on far less.

For example

A manufacturer's balance sheet is dominated by PP&E — factories and machines — whereas a software firm's is mostly cash and intangibles.

Property, plant & equipment (PP&E) is taught hands-on in Stage 14 — Reading Financial Statements.

See the lesson →

Related terms

Accounts receivable (A/R)Money customers owe the company for goods or services already delivered but not yet paid.AccrualsAccounting entries that record revenue or expense before cash actually moves.Annual reportThe yearly disclosure that includes audited financials, MD&A, and footnotes — the primary source for serious investors.Balance sheetThe 'photo' statement — what the company owns, what it owes, and what's left for owners, on a single date.
← Back to the full glossary