Sales to Administrative expense ratio

Sales to Administrative expense ratio =

Total Sales

administrative expenses

AKA: SG&A Expense Ratio

CALCULATION:

INTERPRETATION: measures how well a company is able to manage its non-operating expense and generate sales during the normal course of operations. These expenses are somewhat fixed and the company needs to incur regardless of the level of sales.

Benchmark: EP HA

ROT: an increasing SAE ratio implies that the company is able to generate additional sales with the same fixed infrastructure. A low SAE ratio could imply inherent inefficiencies due to archaic systems and manual processes.

Sales to Administrative expense ratio:

Sales to Administrative expense ratio