Currently i am at the financial Quadrant, Profitability Ratio SGA Expenses to sales Ratio section.
Currently i am stuck at this statement which i can’t understand: ” As always, its is best to compare the SGA sales ratio when the industry average is 20% might look good, but also smell fishy.”
May i know what is “industry average” means?
Hope to hear from you guys soon!!!
Sorry i would like to edit the question instead of asking “May i know what is “industry average” means?”,
I would like to ask what is this statement means: “As always, its is best to compare the SGA sales ratio when the industry average is 20% might look good, but also smell fishy.”
Hope to hear from you guys soon
“Industry average” just refers to the average of company as well as its competitor companies within the same industry. Like SGA Sales Ratio industry average for telcos, are the average SGA Sales Ratio for Starhub, M1 and Singtel.
Usually, companies within the same industry should have somewhat similar industry average metrices, but there are at times that there’s a company which stands out above the others. We find the reason for that, could there be something (technology, efficiency, network, etc) that allows it to stand above the rest? If there is and it is sustainable, perhaps, we have found ourselves a gem. :)
Thank you Jieren :) Great explanation
Thank you for your kind words :)
Thanks Jieren Zheng for the explanation !!! it is very clear and detail!!!
Glad it helped, Marko :)