An operating expense is the cost a company encounters while running its core business operations. This cost is not in direct relation to the manufacture of its products or services, which is why the cost of goods sold (COGS) is not considered a part of operating expense. These expenses include advertising and marketing expense office supplies, maintenance and repairs, salaries and wages, etc., mentioned in the company's income statement.

Operating cost is the expense an enterprise encounters while running a business on a daily basis. It is calculated by adding COGS and total operating expenses. It is an essential financial metric used to assess a firm’s present performance to that of its past. However, it is suggested that OPEX is used as a percentage of revenue generated from sales to compare the efficiency among the competitors, called an operating ratio.

The management’s agenda is to increase the net income of the company or the bottom line. Therefore, the management is always keen to look at OPEX numbers. In an accounting period, depreciation is the cost of the fixed and tangible asset that has been used up. The total depreciation cost of the asset is divided throughout its life span.

It is a non-cash operating expense. The higher the operating profit margin better the company is performing, keeping other things equal. Operating revenue can be increased if the company is able to reduce the operating expenses leading to an increase in the operating profit margin.

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK