Price/Growth Flow

AAA

DEFINITION of 'Price/Growth Flow'

A measure formulated to identify companies that are producing solid earnings and investing a large amount in research and development (R&D). This measure is calculated as the following:



Price/Growth Flow

INVESTOPEDIA EXPLAINS 'Price/Growth Flow'

The price-to-growth flow provides a good indication of how much a company is spending on R&D; however, it does not gauge how successful this R&D will be. A large amount spent on R&D does not guarantee product innovations or a successful market implementation that will generate profits for the company.

RELATED TERMS
  1. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  2. Research And Development - R&D

    Investigative activities that a business chooses to conduct with ...
  3. Profit

    A financial benefit that is realized when the amount of revenue ...
  4. Price-To-Research Ratio - PRR

    A measure of the relationship between a company's market capitalization ...
  5. Times Revenue Method

    A valuation method used to determine the maximum value of a company. ...
  6. Diluted Normalized Earnings Per ...

    A company's profit less one-time earnings, divided by both outstanding ...
Related Articles
  1. Markets

    Buying Into Corporate Research & Development (R&D)

    Investors take note: companies that cut research and development are in danger of saving today but losing big tomorrow.
  2. Investing

    The Ins and Outs Of In-Process R&D Expenses

    Are these charge-offs fair accounting or earnings manipulation? Learn more here.
  3. Fundamental Analysis

    What is the formula for calculating earnings per share (EPS) in Excel?

    Understand the basics of the earnings per share ratio and how this important financial metric is calculated in Excel and used in investment analysis.
  4. Fundamental Analysis

    How do I calculate the debt-to-equity ratio in Excel?

    Understand the basics of the debt to equity ratio, how it is interpreted as a measure of financial stability and how it is calculated in Microsoft Excel.
  5. Fundamental Analysis

    How can I calculate the acid test ratio in Excel?

    Understand how the acid test ratio is used by analysts to determine the financial health of a company and how to calculate this liquidity metric in Excel.
  6. Fundamental Analysis

    What is the formula for calculating the current ratio in Excel?

    Understand the basics of the current ratio, including its use and interpretation as a financial metric and how it is calculated in Microsoft Excel.
  7. Fundamental Analysis

    What is the formula for calculating the quick ratio in Excel?

    Understand the basics of the quick ratio, including how it is used as a measure of a company's liquidity and how to calculate it in Microsoft Excel.
  8. Fundamental Analysis

    How do you calculate operating cash flow in Excel?

    Lenders and investors can predict the success of a company by using the spreadsheet application Excel to calculate the free cash flow of companies.
  9. Fundamental Analysis

    How do you calculate r-squared in Excel?

    Calculate R-squared in Microsoft Excel by creating two data ranges to correlate. Use the Correlate formula to correlate both sets of data, or x and y.
  10. Fundamental Analysis

    How do you use Microsoft Excel to calculate liquidity ratios?

    Learn how to calculate the most common liquidity ratios in Microsoft Excel by inputting financial figures from a company's balance sheet.

You May Also Like

Hot Definitions
  1. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  2. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  4. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  5. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  6. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
Trading Center