SG&A is the largest operating-expenses line for most non-technology companies. Analysts usually track it as a percentage of revenue, because a business that grows revenue while holding SG&A ratio flat is converting growth into profit.
Rising SG&A as a share of revenue is worth a look. It can mean investment in a new sales force, or it can mean the company is buying growth that will not stick.
Example: Northwind Tools reports SG&A of $160M on $840M of revenue, or 19.0%. Two years earlier it was $121M on $680M, or 17.8%. The 1.2 point increase cost roughly $10M of operating profit.
Related: operating-expenses, research-and-development, fixed-costs