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.

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