price-to-growth flow

A method of stock evaluation that measures how much money a company spends on research and development expenses and considers that expenditure to be an important factor in assessing a technology company’s likelihood of future growth. One opinion is that a company’s potential for growth through research and development will compensate for low earnings per share because research expenditures will lead to more innovative products and thus greater profits. To calculate price-to-growth flow, the current stock price is divided by the per share amount of research and development (R&D) spending and earnings per share.