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Understanding the Difference between Operating Expenses and SG&A

👨‍💼 It's important to understand the differences between operating expenses (Opex) and selling, general, and administrative expenses (SG&A). These two types of expenses play a crucial role in the success of a business. 💰


💻 Opex refers to the costs associated with the daily operations, such as rent 🏢, utilities 💡, and salaries 💰. These expenses are necessary to keep the business running, and they are usually recurring. Operating expenses are deducted from revenue to calculate operating profit.


👉 The key difference between Opex and SG&A is that Opex is focused on the costs required to maintain the business operations, while SG&A is focused on the costs of selling and administration, with the goal of supporting business growth and development. 🌱


📈 SG&A expenses are related to the selling and administrative functions. Examples of SG&A expenses include advertising 📢, salaries of administrative staff 💼, legal and professional fees 📝, travel expenses, and office supplies 📎. These expenses are seen as an investment in the growth and development of your business.


🏭IF THE BUSINESS ANALYZED IS YOURS:


📊 It's crucial to keep track of the Opex and SG&A expenses to monitor your business's financial health and make adjustments as needed. Understanding the differences between these two types of expenses can help you make better decisions about where to allocate your resources and invest in the growth and development of your business. 💪


👨‍💼 So, as a business owner or manager, make sure to pay close attention to your Opex and SG&A expenses to keep your business thriving and growing! 💻📈

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