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. Investing

    Are These 2015's Most-Promising Small-Cap Stocks?

    At least one of these small-caps should spike in 2015.
  4. Investing Basics

    Investor, Know Thyself: Choose A Stock Category Based On Your Risk Tolerance

    Choosing the right investment isn't just about choosing the right investment. It also requires that you intimiately understand your own risk tolerance.
  5. Stock Analysis

    The Big Credit Card Companies Have Room to Grow

    With so many credit cards in daily use, credit card issuers have grown with their businesses.
  6. Fundamental Analysis

    Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  7. Investing Basics

    Growth Investing

    Growth investing is a strategy where an investor seeks out companies demonstrating signs of high earnings that are well above the average rate compared to other firms in their industry and within ...
  8. Economics

    5 Reasons To Be Optimistic About The Economy

    I find that defaulting to pessimism about the economy is a great way to hedge your emotional bets.
  9. Investing Basics

    Introduction To Growth Investing

    There are principles and techniques that are applicable for many different types of investors and growth strategies.
  10. Bonds & Fixed Income

    Achieving Better Returns In Your Portfolio

    We look at three risk factors that best explain the bulk of equity performance.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center