Operating expense analysis template |
Download free operating expense analysis template in excel
Operating expenses are essential for analyzing a company's operational performance. It is therefore important for both internal and external analysts to identify a company's opex, to understand its primary cost drivers, and assess management efficiency.
What is included in the operating expenses?
An operating expense is an expense a business incurs through its normal business operations. Often abbreviated as OPEX, operating expenses include rent, equipment, inventory costs, marketing, payroll, insurance, step costs, and funds allocated for research and development.
What is a good operating expense ratio?
The normal operating expense ratio range is typically between 60% to 80%, and the lower it is, the better. “Below 70%, you're doing a really good job of controlling expenses,” says Vice President AgDirect Credit Jerry Auel.
How do you analyze operating costs?
From a company's income statement take the total cost of goods sold, or COGS, which can also be called cost of sales. Find total operating expenses, which should be farther down the income statement. Add total operating expenses and COGS to arrive at the total operating costs for the period.
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