SG&A examples

Operating expenses—also known as selling, general and administrative expenses (SG&A)—are the costs of doing business. They include rent and utilities, marketing and advertising, sales and accounting, management and administrative salaries.

What is not included in SG&A?

SGɪmp;A does not include the direct costs of producing goods or acquiring goods for sale, which are calculated separately as cost of goods sold (COGS). It also excludes research and development (Rɪmp;D) costs. The amount that a company spends on SGɪmp;A may play a key role in determining its profitability.

What is the difference between cogs and SG&A?

COGS is the expense that most directly drives revenue and refers to the direct costs of manufacturing goods sold. SGɪmp;A includes most other costs related to running a business aside from COGS.

What is a good SG&A?

What's a good SGɪmp;A sales ratio? Generally speaking, the lower the better. But average SGɪmp;A sales ratios vary wildly based on industry. For example, manufacturers range anywhere from 10% to 25% of sales, while in health care it isn't unusual for SGɪmp;A costs to approach 50% of sales.

How do you calculate SG&A?

SGɪmp;A Expense = Gross Profit – Operating Income (EBIT)\n\n The calculation excludes interest expense since interest is reported as a non-operating expense (i.e. non-core).