The Selling, General and Administrative (S&GA) Ratio is a key performance indicator used to measure the efficiency of an organization’s sales and marketing performances. It measures the percentage of total sales revenue that is used for administrative costs such as salaries, rent, travel, and other overhead. The lower the S&GA Ratio, the more efficient an organization is at managing its expenses—which is important for profitability. In general, organizations with higher S&GA Ratios may need to review their administrative costs or focus on ways to increase sales before investing in new investments or hiring personnel.