What does SG&A mean in ACCOUNTING
Selling, General and Administrative (SG&A) Expenses refer to those expenses associated with a company's daily operations. These costs are not related to the production of goods or services, but rather the operation of the business as a whole.
SG&A meaning in Accounting in Business
SG&A mostly used in an acronym Accounting in Category Business that means Selling, General and Administrative Expenses
Shorthand: SG&A,
Full Form: Selling, General and Administrative Expenses
For more information of "Selling, General and Administrative Expenses", see the section below.
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Essential Questions and Answers on Selling, General and Administrative Expenses in "BUSINESS»ACCOUNTING"
What type of activities are included in SG&A costs?
Activities included in SG&A costs include marketing, advertising, product research, professional fees, clerical staff wages, rent, travel expenses and more.
How is SG&A different from Cost of Goods Sold (COGS)?
Cost of Goods Sold relates directly to the production or sale of a company's products or services. SG&A Expenses have nothing to do with product production or sales; they are solely related to the general operating costs associated with running a business.
Does a company's size affect its level of SG&A?
Yes, typically larger companies have higher levels of SG&A due to the increased personnel needed for day-to-day operations. Smaller businesses tend to have less overhead associated with their operations and thus lower levels of SG&A.
Are there any other measures used to determine efficiency in relation to SG&A?
Yes, one common measurement is looking at return on investment (ROI). This metric compares an organization's revenue earned from investments against its total cost expenditures. A higher ROI indicates that there is greater efficiency in relation to SG&A.
How does SG&A factor into overall profitability?
In order for a company to achieve profitability it must spend money judiciously on both direct and indirect expenses like those associated with SG&A costs. If these numbers become too large compared to revenue then profitability decreases significantly; however if they are managed correctly they can lead to increased profits in the long run.
Final Words:
In conclusion, Selling, General and Administrative Expenses represent the standard operating costs needed for any business regardless of size or industry type. It is important for companies to closely manage their spending on these non-production related activities in order for them maximize revenue and increase their overall profitability.