Total operating expenses
Also known as: operating expenses, opex, operating costs
Total operating expenses is the sum of all costs incurred in running the business during the period (a quarter or a full year), typically combining , , and . Some present operating expenses excluding , so the exact composition depends on how a company structures its reporting. It is worth checking the footnotes before comparing across companies.
Subtracting total operating expenses from gives you , making this line the bridge between the and the core of the business.
Its significance is less as a standalone figure and more as a control total. Analysts use it to assess operating leverage, the degree to which outpaces expense growth. A business with strong operating leverage sees total operating expenses grow slowly relative to , so each additional dollar of drops more efficiently to .