OPERATING EXPENSE Meaning and
Definition
-
Operating expenses refer to the ongoing costs that a business incurs as part of its daily operations and activities in order to generate revenue. These expenses are incurred regularly and are essential for a company to function efficiently. Operating expenses are distinct from other types of expenses like capital expenses or non-operating expenses.
Operating expenses include various costs such as rent, salaries and wages, advertising, utilities, office supplies, insurance, maintenance, and depreciation. These expenses are generally associated with the production, distribution, and sale of goods or services offered by the business.
Operating expenses are crucial for evaluating a company's profitability and financial health. They are subtracted from a business's gross revenue to calculate the operating income (also known as operating profit or operating earnings). By subtracting the operating expenses from gross revenue, the operating income represents the earnings that a company generates specifically from its core operations.
Analyzing and controlling operating expenses is essential for companies to remain competitive and maximize profitability. Efficient management of these expenses can lead to cost savings and increased profits. By monitoring and analyzing the various components of operating expenses, businesses can identify areas where cost reduction or optimization is possible.
Overall, operating expenses encompass the day-to-day costs incurred by a business as it operates and generates revenue, and their effective management is crucial for maintaining financial stability and success.
Top Common Misspellings for OPERATING EXPENSE *
* The statistics data for these misspellings percentages are collected from over 15,411,110 spell check sessions on www.spellchecker.net from Jan 2010 - Jun 2012.
Other Common Misspellings for OPERATING EXPENSE
- iperating expense
- kperating expense
- lperating expense
- pperating expense
- 0perating expense
- 9perating expense
- ooerating expense
- olerating expense
- o-erating expense
- o0erating expense
- opwrating expense
- opsrating expense
- opdrating expense
- oprrating expense
- op4rating expense
- op3rating expense
- opeeating expense
- opedating expense
- opefating expense
Etymology of OPERATING EXPENSE
The etymology of the term "operating expense" can be broken down as follows:
1. Operating: The word "operating" comes from the Latin word "operari", which means "to work" or "to carry on an action". It can be traced back to the Latin word "opus", which means "work", "task", or "labor".
2. Expense: The term "expense" originates from the Latin word "expensum", which is the past participle of "expendere". "Expendere" means "to pay out" or "to weigh out". It is derived from the Latin words "ex", meaning "out", and "pendere", meaning "to weigh".
Therefore, when combined together, the term "operating expense" refers to the ongoing costs or expenditures incurred by a company in order to keep the business operations functioning or to generate revenue.
Similar spelling words for OPERATING EXPENSE
- operating theatre,
- operating expenses,
- operating capital,
- operating cost,
- operating table,
- operating surgeon,
- operating theater,
- operating budget,
- operating system,
- operating room,
- operating procedure,
- operating microscope,
- operating statement.
Infographic
Add the infographic to your website:
