Capital Goods are goods that are used to make other goods, whether it be durable goods or non-durable goods. Examples of capital goods are machinery, factories, tools, etc. An example workflow: Company ABC purchases a tire machine (capital good). After months of testing and adjusting, company ABC is now able to produce two thousand tires (durable goods) every day. In the previous example, the capital good (tire machine) was used to make other goods (tires).