Posted in Finance, Accounting and Economics Terms, Total Reads: 104
Definition: SG&A- Selling General & Administrative Expenses
Selling, General and Administrative Expenses (SG&A) is an expense borne by the company and is stated in the cost accounts of the company published annually or as per the requirement the company feels. This basically is the addition of all direct and indirect expenses which the company bears during the course of the period during which the cost sheet is being prepared.
As the name suggests, the SG &A would cumulatively be the addition of all expenses related to Selling, General or Administrative purposes for the company. The higher the SG & A, the worse it is for the company as these are expenses and the lesser it is the better it is for the company. A company continually tries to reduce all the expenses related to SG & A as these do not contribute directly to the revenue but the expenses add up to make the cost sheet look unattractive.
For example: All expenses related to the Selling like Sales forecasts, Administrative like HR & Payroll and General expenses cumulatively add up to give the final SG & A of a company.