Operating Expenses

Forbes  Jul 12  Comment 
A growing number of vendors making available pay-as-you-go acquisition alternatives to meet increasing demand for off-balance sheet infrastructure. But can they deliver?
The Economic Times  Jun 19  Comment 
CLSA said Jio’s acquisition cost per new subscriber added is a modest Rs 129, while No 3 carrier, Idea’s is as much as 40% higher at Rs 216.
Cellular News  Sep 19  Comment 
Mavenir, focused on accelerating software network transformation and redefining network economics for Communications Service Providers, today released the results of a Total Cost of Ownership (TCO) model. Click here for more.
OilVoice  Jul 11  Comment 
Reducing drilling and development spend has largely been the focus of services and equipment providers in the Gulf of Mexico with the aim of lowering costs at the most capital intensive period of as
The Hindu Business Line  Oct 11  Comment 
Vedanta Resources said it has reduced capital and operating expenditures in the July-September quarter as the mining conglomerate tries to tackle volatile market conditions as well as subdued meta...


Operating expenses, or OpEx, are the recurring expenses and costs associated with the day-to-day activities of the business, such as research and development expenses and sales and administration expenses, that are essential to the continuous operation and maintenance of a property but not directly associated with production. In short, this is the money the business spends in order to turn inventory into throughput.

Operating expenses are also called non-manufacturing expenses and are usually subdivided into Research and Development Expenses, Selling, General, and Administrative expenses, and Depreciation and Ammortization. In general it includes expenses such as payroll, sales commissions, employee benefits and pension contributions, transportation and travel, amortization, rent, repairs, and taxes, etc. Operating expenses do not include items such as mortgage payments and capital expenditures, but do include depreciation of plants and machinery used for business purposes.

"Operating expenses" as shown in a Company's Financial statements (Income Statement) corresponds to the sum of the company's operating expenses for a certain period of time, such as a month(usually a quarter) or year(annual operating expenses).

The annual operating expenses shown below are the actual costs it takes to run the property, such as property tax, insurance, maintenance, repairs, management fees, utilities, and supplies(as mentioned above) for the corresponding fiscal year.

A ratio used as an indicator of a company's operating efficiency is the Operating Margin. The formula used to calculate the Operating Margin is:

[(Total Revenues – Total Operating Costs) / (Total Revenues)] * 100

This item represents the difference between the Total Revenues and the Total Operating Costs divided by Total Revenues, and is expressed as a percentage. Specifically it is the percentage of Operating Income to Total Revenues. The higher it is the more efficient is a Company.

Follow the Link for a Sample Statement:


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