(Cost management and strategy) As a financial analyst, you have just been handed a 2006 financial report of Firm Z, a large, global pharmaceutical company. Firm Z competes in both traditional pharmaceutical products and in evolving biotechnology products. The following data (in billions) on Firm Z and the pharmaceutical industry are available:

Given these data, evaluate the cost management performance of Firm Z. LO.1

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Firm Z 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