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19 Aug 2015

What is difference between CAPEX and OPEX in business?

These are the two useful terminology what a strategic management professionals in pharma business.

Capital expenditures (CAPEX or capex) are expenditures altering the future of the business.
An operating expense, operating expenditure, operational expense, operational expenditure or OPEX is an ongoing cost for running a product, business, or system.

Its counterpart, a capital expenditure (CAPEX), is the cost of developing or providing non-consumable parts for the product or system.

For example, the purchase of a tablet punching machine involves CAPEX, and raw material (active ingredient and excipients), power and maintenance costs represents OPEX.

In business, an operating expense is a day-to-day expense such as sales and administration, or research & development, as opposed to production, costs, and pricing. In short, this is the money the business spends in order to turn inventory into throughput.


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