general and administrative expenses meaning

General and administrative expenses meaning professional#

The sales to admin expenses ratio is used to show the number of sales that are generated per dollar of administrative expenses. Moreover, these administrative expenses are fixed to the company itself and they do not depend on the number of sales of that company – you can’t pay someone less just because the company had a bad sales month. Naturally, even though they are non-operating expenses, they are vital to the company, as their role is to make sure that a company is functioning properly and, therefore, increases its efficiency of operations. In short, the administrative expenses are the non-operating expenses that are required to keep a company moving, on track.

These expenses include finance and accounting cost, salaries of senior employees, HR expenses, and some other. In order to come up with the administrative expenses of a certain company, we have to rule out the direct delivery or production of the services or products of that company. Of course, if a company uses its fixed cost efficiently, this will eventually result in better sales for the said company. This efficiency ratio is used to measure if a company is efficient at managing its non-operating expenses in order to generate sales during the normal course of a company’s operations.īasically, the sales to administrative expenses ratio shows if a company is using its fixed cost in order to manage its operations smoothly in an efficient way. Release Updates Outlined feature updates from our last releases.Help Center Endless support in case you are stuck.OKR Canvas Kick start your okr implementation right away.Answers (FAQs) Get instant solutions to your queries.OKR Webinars Discover current trends and expert insights.

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General and administrative expenses meaning professional#

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