Operating Expenses (OpEx)

Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

What is Operating Expenses

Operating Expenses are the expenditures that are not directly associated with the production of goods and services. For example: Sales & Marketing costs, Administrative salaries, Research & development costs, as well as any other non-direct costs, are classified as operating expenses.

Operating Expenses Formula

ƒ Sum(Operating Expenses)

How to calculate Operating Expenses

On the New Relic 2020 income statement, the operating expenses are: General and administrative: $99,284, Selling and Marketing expenses: $334,319, Research and development: $148,159. This gives us a total operating expense of $581,762.

Start tracking your Operating Expenses data

Use Klipfolio PowerMetrics, our free analytics tool, to monitor your data. Choose one of the following available services to start tracking your Operating Expenses instantly.

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How to visualize Operating Expenses?

It is sufficient to visualize your Operating Expenses as a summary chart. This type of chart compares your current value to a previous time period.

Operating Expenses visualization example

Operating Expenses


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vs previous period

Summary Chart

Here's an example of how to visualize your current Operating Expenses data in comparison to a previous time period or date range.
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Operating Expenses


Measuring Operating Expenses

More about Operating Expenses

Operating Expenses are critical to determining the operating income. One of the typical responsibilities that management must contend with is determining how to reduce operating expenses to be efficient without significantly affecting a firm's ability to compete with its competitors. However, it is inappropriate to draw the conclusion that the less is better without considering the overall situation. For example, if the company is in the growth stage, operating expenses could increase at a higher rate than revenue. Therefore, it is important to keep in mind while tracking Operating Expenses that the trend is relative to the stage of the business and the maturity of the product.

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