Enjoyed the video? Then subscribe to the channel, and watch my video on Gross Margin vs Operating Margin next: kzitem.info/news/bejne/t3mDsK59anOSi3Y
@THEGIRLSTHATGETITGETIT
Жыл бұрын
Thank you. Subscribed. This was so clear and helpful.
@TheFinanceStoryteller
Жыл бұрын
@@THEGIRLSTHATGETITGETIT Thank you for the kind words! Happy to help. There might be other interesting videos for you to watch in this playlist: kzitem.info/news/bejne/r2yQzX2MeoOWi4Y
@purseypurse4214
11 ай бұрын
Thank you this was very helpful in my horizontal analysis
@RamRamaswami
6 жыл бұрын
This is a very useful video clip, particularly for information on different types of industries, examples, etc. as well as a clear discussion of definitions and general principles. Thank you.
@ngocthanhtruong4074
2 жыл бұрын
Very good and funny videos bring a great sense of entertainment!
@TheFinanceStoryteller
2 жыл бұрын
Yes, I try to keep it as "light" as possible.
@philvantol6124
7 жыл бұрын
Philip, thank you fo sharing. Perfect overview of SGA. Nice to include Tesla, I will share within Tesla
@TheFinanceStoryteller
7 жыл бұрын
You're welcome! I find Tesla a fascinating company: strategy, ambition, products, and financial results. ;-)
@TheFinanceStoryteller
7 жыл бұрын
P.S. Hope your colleagues enjoy the video as well. Interested to hear how many of them pick the right answer to the "quiz"!
@staskim2331
5 жыл бұрын
perfect video! thank you
@TheFinanceStoryteller
5 жыл бұрын
Thank you for watching and commenting. :-) Lovely to hear that.
@katharinepengue4184
7 жыл бұрын
Thanks for the video, Philip. Entertaining and educational. Better yet, I knew the answer!😉
@TheFinanceStoryteller
7 жыл бұрын
Thank you for the compliment, Kate! Well done on the quiz question. That company might be featured a few more times in upcoming videos.
@etavonnibusinessservices8456
2 жыл бұрын
Wow! very useful information and easy to understand.
@TheFinanceStoryteller
2 жыл бұрын
Thank you! SG&A as % of revenue is an important metric to review to measure "support function" efficiency.
@rabath3388
4 жыл бұрын
Great Channel! new sub indeed! Thanks sir!
@TheFinanceStoryteller
4 жыл бұрын
Awesome, thank you! :-)
@mimile2397
7 жыл бұрын
Thanks for the video Philip. Great topic presented in an easy to understand and follow format. So, did GE hit it's 12% SG&A target for end of 2016?
@TheFinanceStoryteller
7 жыл бұрын
Thank you for the compliments, Mimi! Hard to say whether GE hit the SG&A target in 2016, as there is no updated version of the SG&A graph in the latest earnings release. Please note that the target of 12% SG&A applies to industrial SG&A ex-BD, which means both GE Capital and Alstom are excluded. Per GE's 2015 annual report, the 2015 SG&A% was 14% (same as in 2014). When the GE 2016 annual report comes out (expected at end of February), we can hopefully look up an apples-to-apples comparison. Based on my own calculation from GE's P&L in the earnings release, I would say 14.5% in 2016, but that does include Alstom results in both revenue and cost lines. I simply took the $16.1B in industrial SG&A and the $110.8B in sales of goods and services for my calculation, not sure whether any adjustments are needed to either numerator or denominator.
@TheFinanceStoryteller
7 жыл бұрын
The GE 2016 annual report has just come out. As always, a fascinating read. In a section called “How We Drive Industrial Margin Expansion”, there are some specific numbers on GE’s SG&A reduction. Over the last 3 years: $2.3B reduction in SG&A structural costs, $1.3B reduction in adjusted corporate operating costs, ~10,000 Industrial functional employees moved to shared service centers.In the section on targeted operating margin expansion in 2017, SG&A is mentioned twice in the list of six key cost-out drivers: Lower SG&A/Corporate: global operations / shared services; moving authority to segments; reducing operating layersFurther SG&A productivity: horizontal IT; structural simplification & reduce redundancy
@celsiusfahrenheit1176
2 жыл бұрын
LVMH
@Nobody-eu5qn
3 жыл бұрын
Thank you
@TheFinanceStoryteller
3 жыл бұрын
You're welcome!
@kpxkrnkidx
2 жыл бұрын
If you are running a temporary staffing company, does the total employment burden (salaries, benefits, payroll taxes, state/fed taxes) for both corporate staff and temporary employees factor into SG&A? Or, what's the differentiating factor i classifying these expenses as either SG&A or COS?
@TheFinanceStoryteller
2 жыл бұрын
Excellent question, Tyler! Take a look at the annual report of companies like Accenture or Cognizant. Staff that is doing client work (i.e. their hours are billable) go into COS (cost of services). Backoffice people (HR, finance, IT, marketing, sales), in other words those people that are necessary to run the company but whose hours are not (directly) billable to the client, go into SG&A. See also my video on gross margin vs operating margin kzitem.info/news/bejne/t3mDsK59anOSi3Y
@kpxkrnkidx
2 жыл бұрын
@@TheFinanceStoryteller Thank you - for clarification, is it just the compensation (of both corporate staff salaries into SGA, temporary employee salaries into COS) that gets put into their respective categories? Do the associated payroll tax burdens, benefits, and workers compensation insurance that it costs to employ these employees also get bucketed into the loop or is this a separate item entirely?
@TheFinanceStoryteller
2 жыл бұрын
Yep, related costs as well, even their travel and living expenses, cost of their laptop and workspace, etc.
@sammyperska460
4 жыл бұрын
How do you analyze the SGA expenses ratio of a compnay in order to understand if the business is doing well in terms of capital usage for the long term investment ?
@TheFinanceStoryteller
4 жыл бұрын
Hello Sammy! I am not sure that I see any connection between SG&A spending and capital usage for investments. In my view, companies with low SG&A as % of revenue are "lean" and have a product that pretty much sells itself without too much marketing and sales support. Companies that have high SG&A as % of revenue tend to be ones that are operating in a heavily regulated industry (pharma) or spend a lot on advertising to consumers (fast moving consumer goods) or are luxury brands in prime locations. Maybe my video on financial ratio analysis will help: kzitem.info/news/bejne/roqnnXyrr6F4lqA
@PB-ek7dz
3 жыл бұрын
👍👌
@morrissilberstein3591
7 жыл бұрын
I wonder how much was saved in SG&A by cutting back on retiree health care and eliminating the pension plan for recently hired workers & modifying the travel policy. These were the low hanging fruits. Increased worker efficiency will be harder to achieve.
@TheFinanceStoryteller
7 жыл бұрын
Thanks for your comment, Morris. I don't know the specifics, other than what is stated in GE's earning releases, investor presentations and annual report. Reducing SG&A headcount, and transferring support function work from the businesses to shared services, seem to be a big part of it.
@lynescuro3122
3 жыл бұрын
Is it ok po if I combine general administrative and selling expense in income statement?
@TheFinanceStoryteller
3 жыл бұрын
Hi Bernadeth! Yes, in most of the income statements of publicly listed companies, I see SG&A being reported as one line. In some cases, separate lines for selling expenses, and for general and administrative expenses.
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