Comparing Profitability Ratios for Competitors Selected income statement data for Abbott Laboratories, Bristol-Myers Squibb Company, Johnson & Johnson, GlaxoSmithKline plc, and Pfizer, Inc. is presented in the following table: ($ millions) Sales revenue Cost of sales SG&A expense R&D expense Interest expense Net income PM GPM Required a. Compute the profit margin (PM) and gross profit margin (GPM) ratios for each company. (As a British company, GlaxoSmithKline plc has a statutory tax rate of 26.5% in 2014; assume a statutory rate of 35% for all other companies.) (Round your answers to one decimal place.) Abbott Myers Laboratories Squibb Johnson Kline plc Pfizer $41,001 $23,394 $67,280 £29,537 $69,675 15,541 5,598 20,360 7,332 15,085 8,826 19,468 12,757 5,160 20,969 4,129 530 3,839 7,548 4,009 9,112 145 571 799 1,681 5,260 9,672 5,458 10,051 4,728 Abbott Laboratories 7.5% * 4% * Bristol. Johnson Glaxo & Smith R&D ETS SG&A ETS Bristol- Myers Squibb Abbott Laboratories 0% x 0% * 22.5% * 0% * Johnson & Johnson Bristol- Myers Squibb 0% * 0% * 0% x 0% * Glaxo Smith Kline plc b. Compute the research and development (R&D) expense to sales ratio and the selling, general and administrative (SG&A) expense to sales ratio for each company. (Round your answers to one decimal place.) 0% * 0% * Johnson & Johnson 0% x %X Glaxo Smith Kline plc Pfizer 0% * 0% x 0% * 0% * Pfizer 0% * 0% *
Comparing Profitability Ratios for Competitors Selected income statement data for Abbott Laboratories, Bristol-Myers Squibb Company, Johnson & Johnson, GlaxoSmithKline plc, and Pfizer, Inc. is presented in the following table: ($ millions) Sales revenue Cost of sales SG&A expense R&D expense Interest expense Net income PM GPM Required a. Compute the profit margin (PM) and gross profit margin (GPM) ratios for each company. (As a British company, GlaxoSmithKline plc has a statutory tax rate of 26.5% in 2014; assume a statutory rate of 35% for all other companies.) (Round your answers to one decimal place.) Abbott Myers Laboratories Squibb Johnson Kline plc Pfizer $41,001 $23,394 $67,280 £29,537 $69,675 15,541 5,598 20,360 7,332 15,085 8,826 19,468 12,757 5,160 20,969 4,129 530 3,839 7,548 4,009 9,112 145 571 799 1,681 5,260 9,672 5,458 10,051 4,728 Abbott Laboratories 7.5% * 4% * Bristol. Johnson Glaxo & Smith R&D ETS SG&A ETS Bristol- Myers Squibb Abbott Laboratories 0% x 0% * 22.5% * 0% * Johnson & Johnson Bristol- Myers Squibb 0% * 0% * 0% x 0% * Glaxo Smith Kline plc b. Compute the research and development (R&D) expense to sales ratio and the selling, general and administrative (SG&A) expense to sales ratio for each company. (Round your answers to one decimal place.) 0% * 0% * Johnson & Johnson 0% x %X Glaxo Smith Kline plc Pfizer 0% * 0% x 0% * 0% * Pfizer 0% * 0% *
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Comparing Profitability Ratios for Competitors
Selected income statement data for Abbott Laboratories, Bristol-Myers Squibb Company, Johnson & Johnson, GlaxoSmithKline plc, and Pfizer, Inc. is presented in the following table:
Bristol Johnson Glaxo
Abbott Myers
Laboratories Squibb Johnson
&
Smith
($ millions)
Sales revenue
Cost of sales.
SG&A expense
R&D expense
Interest expense
Net income
PM
GPM
Required
a. Compute the profit margin (PM) and gross profit margin (GPM) ratios for each company. (As a British company, GlaxoSmithKline plc has a statutory tax rate of 26.5% in 2014; assume a statutory
rate of 35% for all other companies.)
(Round your answers to one decimal place.)
Abbott
Laboratories
7.5 % *
4% *
Kline plc Pfizer
$41,001 $23,394 $67,280 £29,537 $69,675
15,541 5,598 20,360
7,332 15,085
12,757
4,129
5,160 20,969 8,826 19,468
3,839 7,548 4,009 9,112
145
571
1,681
4,728 5,260 9,672
10,051
530
799
5,458
R&D ETS
SG&A ETS
Bristol-
Myers
Squibb
22.5% *
0% *
Abbott
Laboratories
0% *
0% *
Johnson
&
Johnson
Bristol-
Myers
Squibb
0% *
0% *
0% x
0% x
b. Compute the research and development (R&D) expense to sales ratio and the selling, general and administrative (SG&A) expense to sales ratio for each company.
(Round your answers to one decimal place.)
Johnson
Glaxo
Smith
Kline plc
Johnson
0% *
0% *
0% *
0% *
Glaxo
Smith
Kline plc
Pfizer
0% *
0% X
0% *
0% *
Pfizer
0% x
0% *
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