Operating Expenses
The day-to-day costs of running a business, such as rent, payroll, utilities, and marketing, excluding the direct cost of goods sold.
Operating expenses cover everything needed to keep the business running that isn’t directly tied to producing a specific product or service, and they’re subtracted from gross profit to arrive at operating income.
Working capital financing is commonly used to cover operating expenses during a cash flow gap, like payroll during a slow month, rather than for a specific large purchase.
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