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Comparing the SG&A Expenses of Accenture, IBM, and Wipro in 3Q15

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Selling, general, and administrative expenses

In 3Q15, the selling, general, and administrative expenses (or SG&A) for Accenture (ACN) rose to $1.41 billion from $1.38 billion in 3Q14 and $1.36 billion in 3Q13. SG&A expenses comprised 16.9% of total revenues in 3Q15. In comparison, it comprised 18.2% and 16.8% of total revenues in 3Q13 and 3Q14, respectively.

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IBM’s SG&A

In 3Q15, the selling, general, and administrative expenses for IBM (IBM) fell YoY (or year-over-year) to $4.6 billion from $5.1 billion in 3Q14 and $4.9 billion in 3Q13. SG&A expenses comprised 24.0% of total revenues in 3Q15. In comparison, these expenses made up 21.0% and 22.7% of total revenues in 3Q13 and 3Q14, respectively.

Wipro’s SG&A

In 3Q15, the selling, general, and administrative expenses for Wipro (WIT) rose to $235 million from $234 million in 3Q14. This can be compared to $209 million in 3Q13. Allocated SG&A expenses comprised 12.42% of total revenues in 3Q15. In comparison, the expenses comprised 12.34% and 12.19% of total revenues in 3Q13 and 3Q14, respectively.

Selling, general, and administrative expenses are a major component that affects the profitability of service-oriented firms. Wipro has a relatively lower expense as it’s located in India where the cost of labor is low.

To gain exposure to Accenture, you can invest in the Technology Select Sector SPDR Fund (XLK) and the Vanguard Information Technology ETF (VGT). They invest 1.6% and 1.5% of their portfolios, respectively, in Accenture.

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