Research and Development Ratio
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.
Research and Development Ratio in Python
get_research_and_development_ratio is part of 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.