SG&A Expense as a Percentage of Revenue
This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring SG&A Expense as a Percentage of Revenue. Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.
What is SG&A Expense as a Percentage of Revenue?
The sales, general and administrative-related expenses incurred divided by the total sales generated by the company over the same period of time, as a percentage. SG&A are the costs that occur during the daily operations of a company and not directly related to the manufacturing of the product (i.e., shipping supplies, sales commissions, product advertising, salaries of sales representatives, overhead costs, etc.).
Why should SG&A Expense as a Percentage of Revenue be measured?
SG&A Expense as a Percentage of Revenue measures the SG&A expense that is incurred relative to the dollar amount of revenue the company generated over the same period of time. High values for this metric can be indicative of highly manual (i.e., errors and rework prone) sales and operational processes, excessive time spent on low-value work (e.g., printing, scanning, etc.), overstaffing and/or general inefficiencies within the sales or administrative processes (e.g., salary distribution, inefficient travel management, utilities and insurance payments, inefficient advertising processes, etc.). While companies typically seek to streamline operations and employee positions to reduce SG&A expenses, great care should be taken when doing so as too many layoffs can have a negative impact on company morale.
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