Fundamental Glossary / Financial Statements
Operating Expenditure (OPEX)
The running costs of the business that are expensed as incurred, rather than capitalised.
Formula
Staff, rent, power, selling, repairs, and administration are typical opex. Cost of goods sold is sometimes discussed separately.
What it means
Opex hits profit now. Capex hits profit later, through depreciation. The border between the two is one of the more abused lines in accounting.
A lean opex ratio can mean efficiency. It can also mean under-spending on maintenance, research, or staff who keep customers.
How to read it
Operating leverage is the relationship between opex and sales. Fixed opex makes margins swing harder when revenue moves.
What to watch
A sudden drop in opex just before a fund-raise or a stake sale deserves the same suspicion as a sudden rise in capitalised costs.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.