Selling, General, and Administrative (SG&A) costs for Spirit Pals encompass all the overhead expenses not directly tied to producing their plushies. Selling costs include marketing, advertising, sales team salaries, and commissions—everything that drives awareness and moves products off the virtual shelf. General costs cover day‑to‑day operations like rent for office space, utilities, and administrative staff wages (HR, finance, customer support). Administrative costs are the back‑office expenses such as accounting fees, legal services, software subscriptions, and executive salaries. Together, SG&A represents the sum of these indirect expenses and reflects how much Spirit Pals spends to run its business and support sales beyond the direct manufacturing of each plushie.
A pro forma for Spirit Pals would be a set of forward-looking financial statements—typically including an income statement, balance sheet, and cash-flow statement—built on a series of assumptions about future performance. It would outline projected revenues (e.g., from print sales, digital services, and subscriptions), anticipated cost of goods sold, and operating expenses (marketing, R&D, SG&A). The pro forma would also model capital expenditures (equipment, software), expected financing activities (loans or equity raises), and resulting changes in working capital. Together, these projections help Spirit Pals' leadership and investors evaluate profitability, funding needs, and the financial impact of strategic initiatives over the coming quarters or years.