Question

Ajax Corp.'s sales last year were $435,000; its operating costs were $362,500; and its interest charges were $12,500. What was the firm's times-interest-earned (TIE) ratio

Answer 1

its operating costs were $362,500

What is operating costs?

Operating costs, also known as operational costs, are expenses related to the operation of a business or a device, component, piece of equipment, or facility. They are the expenses incurred by an organization in order to continue to exist.

The ongoing expenses incurred from the normal day-to-day operations of a business are referred to as operating costs. Operating expenses include both costs of goods sold (COGS) and other operating expenses, which are commonly referred to as selling, general, and administrative (SG&A) expenses.

An operating expense is a cost incurred by a company as a result of its normal business operations. Operating expenses, also known as OPEX, include rent, equipment, inventory costs, marketing, payroll, insurance, step costs, and funds set aside for research and development.

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