Читать книгу Entrepreneurial Finance - Robert D. Hisrich - Страница 42

Expenses represent a cost associated with the selling of services and products. Expenses are composed of the cost of goods sold (COGS), operating expenses, financing expenses, and tax expenses. Again, expenses are recorded in the income statement depending on the accounting method chosen.

Cost of Goods Sold (COGS). The cost of goods sold (COGS) includes everything directly connected with the purchasing or production of the services or products that are ultimately sold. These expenses include the wages of the direct labor involved in the production of the product or service, the materials used, parts or components purchased, and repairs made to the equipment of the facility used for production of the product or service. These are expenses directly related to the venture's production of goods or services. If we subtract these expenses from revenue, the resulting sum is gross profit. Gross profit (when gross profit is measured as a percent of sales, it's called gross margin) is defined as the difference between sales of the company's goods and services and the cost of goods sold.

Operating Expenses. The operating expenses, also known as OPEX, represent a category of expenditure directly connected with operating the venture and not directly connected with the production of the product or service. This category includes accounting and legal services, advertising and marketing costs, insurance coverage, office equipment and supplies, office rent (factory rent for production may or may not be included in the COGS depending on the accountant), salaries not directly tied to the production process, utility bills (could also be classified in the COGS depending on the type of business), depreciation (allocation of the cost of a tangible asset spread throughout its economic life), and amortization (allocation of an intangible asset's cost over that asset's useful life).

Other Expenses. Other expenses cover financing expenses (interest paid on loans) and tax expenses associated with the company's profit.