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Sales to Administrative expense ratio
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- Sales to Administrative expense ratio
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: