Annual SG&A Expense Ratio Comparison: AstraZeneca, Pfizer, and GlaxoSmithKline

A Historical Perspective on SG&A Expenses

The Sales, General, and Administrative (SG&A) expense ratio is a critical metric for evaluating a company's operational efficiency. This ratio, expressed as a percentage of revenue, provides insights into how much a company spends on overhead relative to its sales. In this analysis, we delve into the annual SG&A expense ratios of three pharmaceutical giants: AstraZeneca, Pfizer, and GlaxoSmithKline, spanning from 1985 to 2010.

Key Insights

AstraZeneca (AZN)

AstraZeneca's SG&A expense ratio has shown significant fluctuations over the years. Notably, in 2002, the ratio peaked at approximately 34%, indicating a substantial portion of revenue was allocated to SG&A expenses. However, by 2010, this ratio had decreased to around 31%, reflecting improved operational efficiency.

Pfizer (PFE)

Pfizer's SG&A expense ratio has generally been lower compared to its peers. In the early 1990s, the ratio hovered around 53%, but it saw a marked decline in subsequent years. By 2001, the ratio had dropped to about 35%, showcasing Pfizer's efforts to streamline its operations.

GlaxoSmithKline (GSK)

GlaxoSmithKline exhibited a more volatile SG&A expense ratio. In 1994, the ratio spiked to an impressive 67%, the highest among the three companies during the period analyzed. However, by 2010, GSK managed to reduce this ratio to approximately 46%, indicating a significant improvement in cost management.

Conclusion

This comparative analysis of SG&A expense ratios highlights the varying strategies and efficiencies of AstraZeneca, Pfizer, and GlaxoSmithKline over the years. While each company has faced its unique challenges, the overall trend points towards improved operational efficiency and cost management in the pharmaceutical industry.