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SG&A
(Selling, General & Administrative Expenses)
SG&A (Selling, General & Administrative Expenses) encompasses all non-production operational costs, including sales salaries, marketing, rent, and office supplies. Unlike COGS, these support the business rather than directly creating products.
SG&A efficiency is measured as a percentage of revenue - tech companies might average 30-40% while lean manufacturers 10-15%. Analysts watch SG&A trends for signs of bloating or prudent cost control. Some companies break out R&D separately from SG&A. During downturns, firms often cut SG&A first. EBITDA calculations add back SG&A to show operational cash generation before overhead costs.
SG&A efficiency is measured as a percentage of revenue - tech companies might average 30-40% while lean manufacturers 10-15%. Analysts watch SG&A trends for signs of bloating or prudent cost control. Some companies break out R&D separately from SG&A. During downturns, firms often cut SG&A first. EBITDA calculations add back SG&A to show operational cash generation before overhead costs.