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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.
It is a common misconception that costs, in absolute terms, are always cut when improving operational efficiency. It is true for the "same for less" alternative, but not for the two other alternatives. It can be operationally efficient to increase cost - as long as the output is increasing more.
Capital expenditures are the funds used to acquire or upgrade a company's fixed assets, such as expenditures towards property, plant, or equipment (PP&E). [3] In the case when a capital expenditure constitutes a major financial decision for a company, the expenditure must be formalized at an annual shareholders meeting or a special meeting of the Board of Directors.
Days payable outstanding (DPO) is an efficiency ratio that measures the average number of days a company takes to pay its suppliers.. The formula for DPO is: = / / where ending A/P is the accounts payable balance at the end of the accounting period being considered and Purchase/day is calculated by dividing the total cost of goods sold per year by 365 days.
A professional investor contemplating a change to the capital structure of a firm (e.g., through a leveraged buyout) first evaluates a firm's fundamental earnings potential (reflected by earnings before interest, taxes, depreciation and amortization and EBIT), and then determines the optimal use of debt versus equity (equity value).
Out of all the mashed potato mistakes you can make, adding too much liquid to your spuds is sure to ruin your day. After all, nobody wants to take a scoop of soupy mashed potatoes! But what if you ...
Marketing spending is typically expensed in the current period (operational expenditure or OPEX). The idea of measuring the market's response in terms of sales and profits is not new, but terms such as marketing ROI and ROMI are used more frequently now than in past periods. Usually, marketing spending will be deemed justified if the ROMI is ...
Image credits: catcurio It’s no secret that the internet loves cats.Whether they’re wreaking havoc on the plants in their homes, cuddling in bed with their owners, overreacting to the tiniest ...