Finance and accounting
Opex (operating expenses)
Running costs that are not part of COGS.
Facts checked against sources onWhat does Opex (operating expenses) mean?
Operating expenses are the costs of running the business that are not in cost of goods sold: selling, general and administrative costs (often called SG&A), and research and development. Gross profit minus operating expenses gives operating profit. In everyday use, "opex" also means day-to-day spending, as opposed to capex.
Where does it come up in case interview prep?
- The profit and loss statement, line by lineLesson in Business basics for non-business learners
- A light balance sheet, and why profit is not cashLesson in Business basics for non-business learners
- How the three statements link: one company through all threeLesson in Reading a business through its numbers: the three statements, cash and value
- Organisation design: spans, layers, and central or localLesson in People, rules and responsibility: organisation, regulation and sustainability
- Profit and lossLesson
- Organization and post-merger integrationLesson
- How water and waste services work, and who pays for themLesson in Water, waste and utilities
- Water and waste economics: regulated returns, tariffs, desalination and routesLesson in Water, waste and utilities
Related terms
- COGS (cost of goods sold)The direct cost of making the products that were sold.
- EBIT and operating profitProfit from operations, before interest and tax.
- Capex (capital expenditure)Spending on long-lived assets such as machines and buildings.
- ProfitThe money left over after costs. Revenue minus cost.
- RevenueMoney earned from sales, before costs.
- CostWhat it takes to make and sell the product in a period.
- Fixed costA cost that stays the same when volume changes, within a normal range.
- Variable costA cost that rises and falls with how much you make.
Learn it in context
See Opex (operating expenses) at work in a lesson from Business basics for non-business learners, with checks as you go.
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