1. Finance
  2. Budget & Expense Management

R&D Investment Ratio


Measures the proportion of revenue that a company invests in research and development (R&D) activities. A higher ratio could indicate a company's commitment to innovation and future growth. For technology and pharmaceutical companies, this is often seen as an essential investment.


(R&D Expenditure / Total Revenue) x 100


If a company spends $5 million on R&D and has a total revenue of $50 million, the R&D Investment as a Percentage of Revenue would be 10%.