Calculate the research and development (R&D) intensity ratio, an efficiency ratio that measures how much a company reinvests in research and development relative to its revenue.

This ratio is particularly relevant for comparing companies in technology, pharmaceutical and other innovation-driven industries, where R&D spending is a key driver of future growth.

The formula is as follows:

\[\text{R\&D} \text{Intensity Ratio} = \text{Research and Development Expenses} / \text{Revenue}\]

Also known as: R&D intensity, R&D to sales ratio.

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Calculate the Research and Development Ratio in Python

The Research and Development Ratio is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_research_and_development_ratio as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

rd_ratios = toolkit.ratios.get_research_and_development_ratio()

Which returns:

  2021 2022 2023 2024 2025
AAPL 0.0599 0.0666 0.078 0.0802 0.083
TSLA 0.0482 0.0377 0.041 0.0465 0.0676

Parameters

get_research_and_development_ratio accepts the following parameters:

  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
  • trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.
Days of Accounts Payable Outstanding Cash Conversion Cycle Cash Conversion Efficiency Receivables Turnover SGA to Revenue Ratio Fixed Asset Turnover Operating Ratio Selling and Marketing Ratio General and Administrative Ratio Stock-Based Compensation Ratio Deferred Revenue Ratio Working Capital Turnover Ratio

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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