Defining SG&A? | Selling, General, and Administrative Expenses

SG&A is a traditional accounting term found on the P&L which stands for Selling General and Administrative Expenses. It's an operating expense that describes selling general and administrative expenses, or in other words a term for overhead. SG&A is a really important metric because it centers on operational efficiency. It's one of the areas that the company has the most control over. A company has a direct impact on managing overhead, how much they spend on sales and marketing, and how lean and efficient they're running. So SG&A is a crucial indicator to how efficiently the company is running.
It's an important line item that investors and financial analysts look at closely because it's an area where they have the most control in impacting and affecting their operating expenses - and therefore their bottom line profitability.
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