Capital Crime

Capital Crime

There is the hackneyed tale about the marketing director who says that 80 per cent of his company’s returns come from just 20 per cent of the marketing budget. That’s another way of saying that 80 per cent of the marketing spend is money down the drain. The trouble is, adds the marketing director in a moment of rare candidness, he hasn’t got a clue which 20 per cent it is that does its job. What’s true of a company’s marketing spending seems to apply to its capital spending, too; or, at least, that’s what we found from churning thousands of data points relating to the capital expenditure (capex) of companies in the FTSE 350 index of London’s biggest listed companies.

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