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This question is about careers.
What is SG&A in business?
SG&A stands for selling general and administrative expenses. These represent all costs other than those directly related to the production of a good or service.
Typical costs related to the production of a good or service are often the cost of materials and the machinery and labor needed to produce said goods. SGA refers to all additional expenses a business incurs in the process of production. Costs related to sales and marketing as well as rent for facilities are common examples of SGA expenses.
There are many types of expenses that fall under the umbrella of SGA. HR and administrative staff needed for hiring and payroll duties are part of SGA. Additionally, research and development, while crucial to eventual production, is considered a general business expense. A healthy SGA ratio is typically between 10% and 20%, with some pharmaceutical companies operating at 40% to 50%
A healthy SGA ratio can be a reflection of a company's health. Keeping non-production costs in line prevents a company from becoming too top-heavy and allows additional funds to be used to streamline production.
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