Operating companies manufacture products or services. They are often owned by parent companies, who take a percentage of the operating company s profits.

Can refer to the costs incurred by one unit of a product or service, or the cost of maintaining a process over the course of a year. Does not include […]

1. The whole process an input / output system undergoes to progress from initial to final state (which will be identical). 2. The average time to liquidate merchandise or raw […]

The efficiency with which an organization converts resources into outputs. Consider factors like usage of time, energy and finances.

A measure of a managers ability to keep sales revenue high and costs low, expressed as a percentage.

Expenses incurred by the day-to-day running of a business, including sales and supplies.

The results of dividing operating expenses by potential gross income . If the ratio is high, then rents must be low or operating expenses will be high.

Expenses incurred by the day-to-day running of a business, but not related to the production process .

Calculation of running costs and probable income over a fixed period of time.

See OPERATING EXPENSE RATIO .

The extent to which a companys future income might be affected by changes in exchange rates and price fluctuation.

Income generated by a companys core business, without additional income / expenses and before interest / tax.

Legal owner of oil and gas rights, including revenues produced, but also responsible for operating costs.

A lease that expires before the asset’s economic life.

The level that a companies income is fixed.

These are short term financial liabilities that result from the day-to-day operation of a business.

A loss caused by the companys core business failing to produce enough revenue to cover its operating costs. Without additional income, a business with an operating loss will eventually be […]

A margin that doesnt include depreciation or taxes, calculated by dividing operating income by net sales.

Measures the sales of oil and gas, providing a means to compare different time periods, companies or operations.

Operating expenses that cannot be attributed to any one part of the business.

Determines the total income earned from sales revenue , providing a measure of profitability .

A plan produced by the management team, detailing how short-term objectives will be achieved.

Measures how much revenue remains after operating costs are deducted, so companies can develop appropriate pricing strategies for their products and services.

Calculating income less expenses can help to show how a company transforms sales into revenue. This can also show how well a profitable company is operating.

The amount of a factory or plants capacity that is currently being used.