Price/Growth Flow

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

BREAKING DOWN '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. Interest Coverage Ratio

    A debt ratio and profitability ratio used to determine how easily ...
  6. Debt/Equity Ratio

    Debt/Equity Ratio is debt ratio used to measure a company's financial ...
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. Mutual Funds & ETFs

    The 4 Best American Funds for Growth Investors in 2016

    Discover four excellent growth funds from American Funds, one of the country's premier mutual fund families with a history of consistent returns.
  4. Mutual Funds & ETFs

    The 4 Best Vanguard Funds for Growth Investors in 2016

    Discover four mutual funds managed by the Vanguard Group that would be attractive for investors interested in investing in growth stocks in 2016.
  5. Stock Analysis

    3 Reasons to Invest in Frontier Markets in 2016

    Learn why investing in frontier markets will be a great long-term investment as these markets grow in ways that will propel them to success in the future.
  6. Stock Analysis

    The Top 5 Financial Penny Stocks for 2016 (CPSS, ASRV)

    Learn about some of the most promising penny stocks in the financial services sector that investors can consider adding to their portfolio for 2016.
  7. Stock Analysis

    Qualcomm Stock: A Dividend Analysis (QCOM)

    Read an analysis of Qualcomm, Inc. and its dividends, which are poised to increase in the future due to the growing mobile device market.
  8. Stock Analysis

    The Top 5 Small Cap Healthcare Stocks for 2016 (SMED, SAGE)

    Get valuable information on five top small cap health care stocks that offer excellent potential to outperform for investors in 2016.
  9. Stock Analysis

    5 Penny Stocks to Watch in 2016 (ZIXI, AMRS)

    Discover five of the most promising penny stocks that investors may wish to consider adding to their investment portfolios during 2016.
  10. Term

    Series B Financing to Expand Business

    Businesses acquire Series B financing from private equity investors or venture capitalists after two earlier rounds of financing.
RELATED FAQS
  1. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  2. What is the formula for calculating the debt-to-equity ratio?

    Expressed as a percentage, the debt-to-equity ratio shows the proportion of equity and debt a firm is using to finance its ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
  6. What is the formula for calculating weighted average cost of capital (WACC)?

    Weighted average cost of capital (WACC) is the average after-tax cost of a company’s various capital sources, including common ... Read Full Answer >>
Hot Definitions
  1. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  2. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  3. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  4. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  5. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  6. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center