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SG&A (alternately SGA, SAG, G&A or SGNA) is an initialism used in accounting to refer to Selling, General and Administrative Expenses, which is a major non-production cost presented in an income statement (statement of profit or loss). SGA expenses consist of the combined costs of operating the company, which breaks down to:
Overhead expenses are all costs on the income statement except for direct labor, direct materials, and direct expenses. Overhead expenses include accounting fees, advertising , insurance , interest, legal fees, labor burden, rent , repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.
In practice, this equivalence does not always hold, and depending on the period under consideration by management, some overhead expenses (e.g., sales, general and administrative expenses) can be adjusted by management, and the specific allocation of each expense to each category will be decided under cost accounting. In recent years, fixed ...
Operating expenses Selling, general and administrative expenses $8,172 Depreciation and amortization: $960 Other expenses $138 Total operating expenses $9,270 Operating profit $3,225 Non-operating income $130 Earnings before interest and taxes (EBIT) $3,355 Financial income $45 Income before interest expense (IBIE) $3,400 Financial expense $190
Expenses are recognized not when the work is performed, or when a product is produced, but when the work or the product actually makes its contribution to revenue. Only if no connection with revenue can be established may cost be charged as expenses to the current period (e.g., office salaries and other administrative expenses).
Critically, in assessing a company's financial position (and reading its balance sheet), COE is distinguished from CAPEX, or costs associated with Capital Expenditures. [ 7 ] [ 8 ] Ke is most often used in the Capital Asset Pricing Model (CAPM), in which Ke = Rf + ß(Rm-Rf).