Research & Development Expense as a Percentage of Total Revenue

Benchmarking Report

Research & Development Expense as a Percentage of Total Revenue

This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring Research & Development Expense as a Percentage of Total Revenue. Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.


What is Research & Development Expense as a Percentage of Total Revenue?

The total amount of research and development-related expense incurred divided by the total revenue earned by the company over the same period of time, as a percentage.

Why should Research & Development Expense as a Percentage of Total Revenue be measured?

Research & Development (R&D) Expense as a Percentage of Total Revenue measures the cost incurred by the company's R&D Department relative to total revenue generated by the company over the same time period. R&D Department expense should consume a relatively small portion of the company's assets, particularly in industries such as banking, where new product development is not as essential to revenue growth. On the other end of that spectrum, pharmaceutical companies and software companies will typically have higher R&D spending to keep a competitive advantage. In any case, relatively high R&D costs may be related to high work cycle times, overstaffing and/or general inefficiencies within R&D processes (e.g., idea generation, market research, product approval, product testing, etc.).


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Frequently Asked Questions

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