Operating expenses - Financial definition
Concise definition of the term operating expenses
Operating expenses refer to the ongoing costs incurred by a business in its day-to-day operations, excluding costs directly associated with production.
Comprehensive definition of the term operating expenses
Operating expenses encompass various expenditures necessary for the regular functioning of a business, such as salaries of administrative staff, rent, utilities, and marketing expenses. They are crucial in assessing a company's operational efficiency and financial health, often scrutinized by investors and analysts to evaluate cost management strategies and overall performance.
Examples include administrative costs, research and development expenses, and sales commissions, which are essential components in determining a company's profitability and competitiveness within its industry.