SG&A covers the overhead of selling and running the company.
What it is
SG&A covers the operating costs of selling products and running the company that are not part of the direct cost of making the product. It includes things like sales-team salaries and commissions, advertising and marketing, office rent, legal and accounting fees, and executive pay. It sits below gross profit on the income statement.
Why it matters
SG&A as a share of revenue shows how much overhead it takes to generate sales; a falling ratio as revenue grows is a sign of scale and discipline. Bloated or fast-rising SG&A can quietly erode operating margins even when sales are growing.
How it's calculated
It is reported directly on the income statement, often split into selling expense and general & administrative expense; analysts typically track it as a percentage of revenue.
How Quintarthai uses it
SG&A and its trend versus revenue are visible on the Financials 10-yr tab of a company's deep-analysis page, useful for spotting cost discipline over time — open a company page.
Cross-border note. Under US GAAP and IFRS (common for Canadian filers) the line is built the same way, but companies differ in what they fold into SG&A versus cost of goods sold or R&D, so compare the ratio's trend within a company before comparing the absolute level across companies.
FAQ
Is R&D part of SG&A?
No. Research & development is usually reported as its own line item, separate from SG&A, because investors want to see innovation spending distinctly. Some companies report a combined 'operating expenses' figure, but most break R&D out on its own.
What does it mean if SG&A grows faster than revenue?
It usually signals shrinking operating leverage — overhead is rising faster than sales, which compresses operating margin. Persistent overshoot can point to weak cost control or heavy spending to chase growth.
Check your understanding
If a company's revenue is growing but its SG&A is rising even faster, what does that most likely signal?
When overhead grows faster than revenue, the SG&A-to-revenue ratio rises and operating margin gets compressed, the opposite of gaining scale.