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Finance Dictionary and Glossary of Investment Terms
Selling, General and Administrative Expenses
SG&A. Income statement item which combines salaries, commissions, and travel expenses for executives and salespeople, advertising costs, and payroll expenses.
Includes all salaries, indirect production, marketing, and general corporation expenses. Examining this figure as a percent of sales or net income compared to other companies in the same business can give some idea of whether management runs a tight ship. In recent years many companies have conducted a war on corporate overhead, cutting layers of management and reducing central administration. On the other hand, chief executive salaries have continued to soar.Note also the importance of assessing this data in the context of a company''s industry. In some businesses, such as those that depend on a great deal of TV advertising, marketing expenses can be enormous.