Question

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)	Abbott Laboratories	Bristol- Myers Squibb	Johnson & Johnson	Glaxo Smith Kline plc	Pfizer
Sales revenue	$20,247	$11,660	$74,331	$35,872	$49,605
Cost of sales	9,218	3,932	22,746	11,418	9,577
SG&A expense	6,530	4,822	21,954	13,466	14,097
R&D expense	1,345	4,534	8,494	5,379	8,393
Interest expense	150	203	533	1,134	1,360
Net income	2,284	2,029	16,323	4,297	9,168

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	Bristol- Myers Squibb	Johnson & Johnson	Glaxo Smith Kline plc	Pfizer
PM	Answer	Answer	Answer	Answer	Answer
GPM	Answer	Answer	Answer	Answer	Answer

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.)

	Abbott Laboratories	Bristol- Myers Squibb	Johnson & Johnson	Glaxo Smith Kline plc	Pfizer
R&D ETS	Answer	Answer	Answer	Answer	Answer
SG&A ETS	Answer	Answer	Answer	Answer	Answer

Answer 1