TERVIA Capital

Where a company's money goes.

TERVIA Capital is the group's finance arm: it manages capital, investments and financing for the TERVIA companies. Here is a basic guide to reading any business's expenses.

Informational guide

Four types of expense, four different questions.

OpExOperating expense

“The cost of running the operation.”

What it is: Recurring day-to-day costs, fully expensed in the period.
In the financial statements: Hit the income statement directly and reduce profit for the period. They create no asset.
When to review it: Monthly, against budget and as a percentage of sales.
Examples: Rent, salaries, utilities, minor maintenance, software subscriptions.
Common mistake: Mixing it with capital expenditure or not reviewing recurring costs.

CapExCapital expenditure

“The cost of building capacity.”

What it is: Purchases of assets that deliver value for more than a year.
In the financial statements: Recorded as assets on the balance sheet and depreciated or amortized over time.
When to review it: When planning growth, buying equipment or expanding facilities.
Examples: Machinery, barns and pens, vehicles, tanks, in-house software development.
Common mistake: Underestimating total cost and the maintenance that comes after.

RevExRevenue-linked expense

“The cost of selling.”

What it is: Direct costs to generate revenue and deliver the product or service.
In the financial statements: Affect gross profit and move with sales volume.
When to review it: When setting prices and analyzing each product's margin.
Examples: Cost of goods sold, sales commissions, freight and delivery, card processing.
Common mistake: Ignoring hidden costs or assigning them to the wrong product.

FinExFinancial expense

“The cost of money.”

What it is: Costs of financing the company and managing its capital structure.
In the financial statements: Reduce net profit and weigh on leverage ratios.
When to review it: When taking on or refinancing debt and planning cash flow.
Examples: Interest, bank fees, foreign-exchange costs, cost of raising capital.
Common mistake: Borrowing too early or looking only at the rate instead of total cost.

General content for informational purposes only. It is not investment advice or a personalized recommendation; the tax and accounting treatment of each expense depends on applicable rules and on each company. See regulatory notices →