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        Impact of Selling, General and Administrative Expenses on Financial Sustainability of IT Companies Listed in S&P 500

        Seetharaman,Santhikumar Pitta,Krishna Moorthy,Saravanan 한국유통과학회 2016 유통과학연구 Vol.14 No.4

        Purpose– This paper attempts to determine the importance of financial sustainability and the impact of Selling, General and Administrative Expenses (SG&A) on the financial sustainability of the IT industry. Research design, data, and methodology Primarily the im – -pact of SG&A expenditure on the sales revenue, assets, gross margins and profit is ascertained. After that the impact of SG&A expenditure, sales revenue, assets, gross margins and profit on the financial sustainability i.e., return on assets is worked out. Finally the impacts of financial sustainability i.e., return on assets on total enterprise value and market valuation multiples are found out. Results The empirical result shows that SG&A expenditure – most strongly impacted sales revenue, assets, gross margins and profit positively. Financial sustainability impacted in mixed manner with SG&A expenditure, sales revenue, assets, gross margins and profit. Assets and gross margins have weak positive impact on financial sustainability. Sales revenue has no impact on financial sustainability. Finally financial sustainability had moderate positive impact on total enterprise value and had no impact on market valuation multiples. Conclusions SG&A expense has moderate positive impact – on the financial sustainability and magnitude is very low.

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