Selected income statement data for Abbott Laboratories, Bristol-Myers Squibb Company. Johnson & Johnson. GlaxoSmithKline pie. and Pfizer, Inc. is presented in the following table:

REQUIRED:

a. Compute the profit margin (PM) and gross profit margin (GPM) ratios for each company. (As a British company, GlaxoSmithKline pie has a statutory tax rate of 19.25% in 2017. Assume a tax rate of 35% for the others.)

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.

c. Compare the relative profitability of these pharmaceutical companies.

Transcribed Image Text:

Bristol- Johnson Glaxo Myers Squibb Abbott & Smith (millions) Laboratories Johnson Kline plc Pfizer Sales revenue.. Cost of sales.. SG&A expense. R&D expense. Interest expense. Net income.. $27,390 $19,258 6,066 $76,450 £30,186 $52,546 12,337 25,354 10,342 11,240 21.420 9,672 4,476 9,117 4,687 14,784 2,235 6,411 10,554 7,657 904 196 934 734 1,270 21,355 477 975 1,300 2,169