ACSOI, a non-standard accounting metric in the USA, treats marketing and customer acquisition costs as capital expenditures rather than operating expenses, which can inflate a company's net profit in the current accounting period.
Breaking the Buck refers to a decline in the normally constant $1 net asset value (NAV) of a money market fund. This can occur if the fund suffers severe losses or if investment income falls below operating expenses.
Economic Life refers to the period during which a machine or other property is expected to generate more revenue than operating expenses, thereby staying profitable and justifying its use.
The expense ratio is a financial metric that measures the ratio of operating expenses to gross income for real estate properties or the percentage of total investment paid by shareholders for mutual fund operating expenses and management fees.
A gross lease is a rental agreement where the landlord is responsible for paying all property expenses, including taxes, insurance, utilities, and repairs. Under this lease, the landlord receives rent as a gross figure and covers the operating expenses.
Gross profit, also known as gross margin or gross profit margin, is the difference between a company’s sales revenue and its cost of goods sold (COGS), excluding operating expenses such as finance, administration, and distribution costs.
Net Operating Income (NOI) is a key metric in real estate and business investment that measures the profitability of an income-generating property before costs like taxes and financing expenses are considered.
Operating expenses are the costs and operating revenues are the income incurred and generated by an organization in the normal course of business, excluding any extraordinary items.
The profit or loss generated by a company's core business activities, calculated before accounting for extraordinary items, interest, and taxes.
Pass-throughs refer to operating expenses that can be charged to a tenant along with the usual rent, as defined in the lease. Additionally, the term also relates to pass-through certificates in the context of mortgage-backed securities.
Segment margin is a profitability measure used to evaluate the financial performance of a business segment, such as a division, territory, or product line. It equals segmental revenue minus related product costs and traceable operating expenses attributable to that segment.
A clause in a lease agreement that stipulates the amount of operating expenses above which the tenant is required to pay. It protects the lessor by ensuring that any increase in operating expenses is covered by the tenant once a predefined threshold is reached.
The Theory of Constraints (TOC) is a systematic approach that aims to identify and eliminate bottlenecks in a production system. It aims to increase profits while simultaneously reducing stock levels and operating expenses.
A Triple-Net Lease (NNN) is a commercial real estate lease agreement in which the tenant agrees to pay all operating expenses related to the property, in addition to the rent paid to the landlord.
Wages costs are expenses incurred by businesses to compensate employees for their labor. These are a critical part of operating costs in any organization.
