Non-recurring and Recurring Expenses
Recurring expenses are the company's ongoing costs. These can include administrative costs, debts and other long-term costs that help the business function. Businesses measure recurring expenses to understand the basic operating costs of the company, which is also an important consideration for investors. Investors might look at a company with low operating costs as an excellent investment opportunity. The company typically includes all of its recurring expenses on its balance sheet or annual reporting.
For example, if a company reduces its supply costs by choosing a different supplier for raw materials, it could result in the company being more profitable in the future. This is appealing to potential investors.
A nonrecurring expense is a cost the company incurs irregularly. Sometimes, a business may experience an emergency cost or need to purchase new equipment. These are nonrecurring expenses that the company still includes on its balance sheet. Each nonrecurring expense takes away from the company's ___ ____ _____ ____ ___.
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