- The costs sustained by a company through its business operations in order to produce revenue. As it relates to cash flow, there are three main categories of expenses: operational expenses (ongoing costs from maintenance, office supplies, employee salaries, etc.), capital expenditures (onetime costs from the purchases of assets), and financing expenses (ongoing costs from interest on loans, bonds, and other forms of financing). Businesses try to lower expenses without negatively impacting revenue in order to maximize profit. Also known as an "expenditure."
Related Terms and Acronyms
- Accounting Period (AP) — Acronym, Important,
- The time period used in a set of accounting books or financial statements, often 12 months.
- Capital Cost Allowance (CCA) — Acronym, Canada,
- Capital Cost Allowance is a method of expensing depreciable assets as defined by the Canadian Income Tax Act (ITA).
- Capital Expenditure — Definition,
- The cost of making an improvement to a property.
- Financing Expenses — Definition,
- Expenses sustained from interest payments, financing, and dividends to shareholders.
- Fixed Expenses (FE) — Acronym,
- Fixed business costs that do not change regardless of business volume, such as property rental, insurance payments, utilities, etc.
- Loss — Definition,
- When expenses are larger than revenues.
- Moving Expenses — Definition,
- Expenses incurred when you moved in connection with your job and are deductible if they are the reasonable costs of moving yourself, your family and your possessions. You can no longer deduct the cost of meals while moving.
- Operating Cash Flow (OCF) — Acronym,
- The money a company generates from its business operations. This revenue excludes costs from certain investments.
- Operating Loan — Definition,
- A loan intended for short-term financing, supplying cash flow support or to cover day-to-day operating expenses.
- Operational Expenses (OpEx) — Abbreviation,
- Costs accruing from a business's business operations.
- Other Income/Expenses — Definition,
- Any income or expenses earned or disbursed by a business that are not clearly associated to its core operations.
- Profit — Definition,
- When revenues exceed expenses.
- Short-term Liabilities — Definition,
- Money that you have to pay in less than 12 months, including wages, short-term loans, taxes, credit card balances and long-term loans.
- Solvency — Definition,
- To be able to meet one's financial liabilities in the short or long term.