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Opex (operational expenditure)

Contributor(s): Brita Van Fossen

An operational expenditure (Opex) is the money a company spends on an ongoing, day-to-day basis in order to run a business or system. Depending upon the industry, these expenses can range from the ink used to print documents to the wages paid to employees. The counterpart, Capex, is the money spent on the improvement or purchase of fixed assets.

There is a direct correlation between Opex and the value of the enterprise, in that when the Opex decreases, while maintaining the same level of production and quality, the overall value of the enterprise increases.

Opex and Capex are commonly used financial reporting terms. A similar but not closely related term, forex, stands for foreign exchange.

 

See also: operational costs, hoteling, cost center, IT chargeback system, IT MOOSE management, EBITDA

 

Continue reading about OPEX:

 > The difference between Opex and Capex

 > Opex vs. Capex: Maintaining the right balance

 > Capex to Opex: Conversion of IT investments

This was last updated in December 2011

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