Research spend to revenue (R&D/revenue)
How much of revenue is spent on research and development.
For a technology or pharmaceutical business this is the reinvestment that decides whether it exists in ten years.
How it is computed here
Research and development expense / revenue x 100
Measured over the latest complete fiscal year, as filed. Filed under risk. Neither a high nor a low reading is good on its own, so it is never coloured as one.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Neither high nor low is good on its own. It is only meaningful next to what the spending produced.
- Capitalising rather than expensing development moves the number without changing the spending.
- Zero is normal and correct for most industries.
Questions
How is research spend to revenue calculated?
Research and development expense / revenue x 100. Measured over the latest complete fiscal year, as filed.
What does research spend to revenue tell a value investor?
For a technology or pharmaceutical business this is the reinvestment that decides whether it exists in ten years.
When does research spend to revenue mislead?
Neither high nor low is good on its own. It is only meaningful next to what the spending produced. Capitalising rather than expensing development moves the number without changing the spending. Zero is normal and correct for most industries.