SGA to Revenue Ratio
Calculate the sales, general, and administrative (SG&A) expenses to revenue ratio, which measures the SG&A expenses relative to the revenue of the company.
The SG&A to revenue ratio is calculated by dividing the total SG&A expenses by the company’s revenue, as a fraction (0.06 is 6%). It provides insight into the efficiency of a company’s cost management and its ability to control its overhead costs.
The formula is as follows:
\[\text{SG\&A} \;\text{to Revenue Ratio} = \text{SG\&A} \;\text{Expenses} / \text{Revenue}\]Also known as: SG&A ratio, selling general administrative ratio.
SGA to Revenue Ratio in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_sga_to_revenue_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["KO", "PEP", "MDLZ"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_sga_to_revenue_ratio()
Or, after setting up the Finance Toolkit MCP, ask:
How much of their revenue did Coca-Cola, PepsiCo and Mondelez spend on selling, general and administrative expenses from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| KO | 0.3069 | 0.2945 | 0.3057 | 0.3069 | 0.3029 |
| MDLZ | 0.2181 | 0.2344 | 0.2222 | 0.2041 | 0.1861 |
| PEP | 0.393 | 0.3989 | 0.401 | 0.4049 | 0.3978 |
Parameters
get_sga_to_revenue_ratio accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows (per quarter and not annualized with quarterly data). | 4 |