Question:
(Cost management and strategy) As a financial analyst, you have just been handed the 2010 financial report of Firm A, a large, global pharmaceutical company. Firm A competes in both traditional pharmaceutical products and in evolving biotechnology products. The following data (in billions) on Firm A and the pharmaceutical industry are available:
|
Firm A
|
Industry Average
|
|
Sales
|
$2.00
|
$0.960
|
|
Net income
|
0.54
|
0.096
|
|
Advertising
|
0.04
|
0.160
|
|
Research and development
|
0.16
|
0.240
|
|
New investment in facilities
|
0.20
|
0.240
|
Given these data, evaluate the cost management performance of Firm A.