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Accounting. An operating expense (opex) [a] is an ongoing cost for running a product, business, or system. [1] Its counterpart, a capital expenditure (capex), is the cost of developing or providing non-consumable parts for the product or system. For example, the purchase of a photocopier involves capex, and the annual paper, toner, power and ...
Operating Cost is calculated by Cost of goods sold + Operating Expenses. [citation needed] Operating Expenses consist of : Administrative and office expenses like rent, salaries, to staff, insurance, directors fees etc. Selling and distribution expenses like advertisement, salaries of salesmen. It includes all operating cost such as salary ...
v. t. e. A company 's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, [1] pronounced / ˈiːbɪtdɑː, - bə -, ˈɛ -/ [2]) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its ...
Operating ratio. In finance, the operating ratio is a company's operating expenses as a percentage of revenue. This financial ratio is most commonly used for industries which require a large percentage of revenues to maintain operations, such as railroads. [1] In railroading, an operating ratio of 80 or lower is considered desirable.
A good operating margin is needed for a company to be able to pay for its fixed costs, such as interest on debt. A higher operating margin means that the company has less financial risk. Operating margin can be considered total revenue from product sales less all costs before adjustment for taxes, dividends to shareholders, and interest on debt.
Earnings before interest and taxes. In accounting and finance, earnings before interest and taxes (EBIT) is a measure of a firm's profit that includes all incomes and expenses (operating and non-operating) except interest expenses and income tax expenses. [1][2] Operating income and operating profit are sometimes used as a synonym for EBIT when ...
Operating expense (OE) is the money the system spends in generating "goal units." For physical products, OE is all expenses except the cost of the raw materials. OE includes maintenance, utilities, rent, taxes and payroll.
The operating budget contains the revenue and expenditure generated from the daily business functions of the company. [1][2] It concentrates on the operating expenditures — the cost of goods sold, the cost of direct labour and direct materials that are tied to production; as well as the overhead and administration costs tied directly to ...