Research and development
Expense recognized for developing products and technology.
Worked example · a round-number company
Research and development$1.0B÷Revenue$5.0B=Share of revenue20.0%This period$1.0B÷A year before$800M− 1 =Change+25.0%How to read it
↕Neither higher nor lower is better. Shows investment in future products that reduces current profit.
Keep in mind
- Some development spending is capitalized, so this is not all innovation spending.