Financial modelling terms explained


Opex is a financial term that stands for operating expenses. Opex is equivalent to the cost of operations of a company.SEO meta description: A breakeven analysis is a useful financial model for estimating the impact that changes in the levels of fixed and variable costs will have on the business's bottom line.

What is Opex?

Opex is an abbreviation for "operating expenses." Opex is a category of expenses that includes the costs of running a business, such as the costs of salaries, rent, materials, and services. Opex can be divided into two categories: fixed opex and variable opex. Fixed opex are expenses that stay the same regardless of how much business a company does, while variable opex are expenses that change with the amount of business a company does. For example, the rent for a company's office is a fixed opex, while the cost of the electricity to run the office is a variable opex.

How do you calculate Opex?

Operating expenses, or opex, is the cost of maintaining and running a business. This includes costs such as rent, utilities, payroll, and advertising. In order to calculate opex, you need to first determine the total amount of expenses for a given period of time. This can be done by reviewing past invoices, bank statements, and other financial documents. Once you have an estimate of total expenses, you can then break this down into categories such as rent, utilities, payroll, and advertising. This will give you a better understanding of how much each category of expense contributes to the overall opex.

What's the difference between Opex and Opex?

Opex is a business term used to describe the Operating Expenses of a company. These expenses can include items such as the cost of goods sold, employee salaries, rent, and utilities. Opex is calculated by subtracting the cost of goods sold from the company's revenue. Opex can also be described as the amount of money a company spends in order to generate a unit of revenue.

The term Opex is often used interchangeably with the term operational expenses. However, there is a slight difference between the two terms. Opex includes all of the expenses that are necessary for a company to generate revenue. This includes the cost of goods sold, as well as administrative and marketing expenses. Operational expenses, on the other hand, only includes the administrative and marketing expenses. The cost of goods sold is not included in the calculation.


In order to value a company, one of the key inputs required is the company's expected future cash flows. This can be estimated by forecasting the company's revenue and then subtracting the company's expected costs and expenses. Once these cash flows are estimated, they can be discounted back to the present in order to arrive at a present value. This present value can then be compared to the company's current stock price to see if the company is undervalued or overvalued.

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