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Baker Hughes Inc. (NYSE:BHI)
Selling, General, & Admin. Expense
$970 Mil (TTM As of Dec. 2013)

Selling, general, & admin. expense (SGA) includes the direct and indirect costs and all general and administrative expenses of a company. Baker Hughes Inc.'s selling, general, & admin. expense for the three months ended in Dec. 2013 was $0 Mil. Its selling, general, & admin. expense for the trailing twelve months (TTM) ended in Dec. 2013 was $970 Mil.


Definition

Selling, General, & Admin. Expense (SGA) includes the direct and indirect costs and all general and administrative expenses of a company. For instance, personnel cost, advertising, rent, communication costs are all part of SGA.

Baker Hughes Inc. Selling, General, & Admin. Expense for the trailing twelve months (TTM) ended in Dec. 2013 was 322 (Mar. 2013 ) + 329 (Jun. 2013 ) + 319 (Sep. 2013 ) + 0 (Dec. 2013 ) = $970 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

An efficient operation keeps SGA costs low and thus has higher profit margin. The percentage of SGA relative to total revenue is an indication of how efficiently the company operates. Compare this percentage among the companies in the same industry is a good way of finding more efficient operations. A comparison of the SGA cost relative to the revenue with the historical value can also be an indication of how efficient the company has become.

Warren Buffett likes companies with consistent SGA as the percentage of gross profit.

Companies with no durable competitive advantage show wild variation in SG&A as % of Gross Profit.

If SGA is less than 30% of Gross Profit, it is fantastic. If SGA is nearing 100%, it is is in highly competitive industry.


Related Terms

Gross Profit, Cost of Goods Sold


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Baker Hughes Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
SG&A 9121,0101,3119331,1081,1201,2501,1901,3161,306

Baker Hughes Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
SG&A 3013283393053553173223293190
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