What does OpEx refer to in a financial context?

OpEx, in a financial context, refers to Operating Expenses. This term encompasses the ongoing costs for running a business or institution that are necessary to maintain its operations. Operating expenses are typically incurred through the normal business activities and include costs such as rent, utilities, salaries, and other overhead costs related to daily operations. Understanding OpEx is essential for financial analysis, as it impacts profitability and cash flow.

In contrast to capital expenditures (CapEx), which refer to the costs associated with acquiring or upgrading physical assets like property or equipment, operating expenses recur regularly and are essential for the business to function. This distinction is crucial for budgeting, financial reporting, and strategic planning in any organization.