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ADVFN HomeHelpFinancialsDeeper AnalysisINVESTMENT RATIOS - Market Value AnalysisPrice-Quality (PQ) Ratio
INVESTMENT RATIOS - Market Value Analysis
  Price-Quality (PQ) Ratio
  Tobin's Q Ratio
  Tobin's Q Ratio (excl. intangibles)
  Dividend Yield
  Market-to-Book Ratio
  Price-to-Pre-Tax Profit PS
  Price-to-Retained Profit PS
  Price-to-Cash Flow PS
  Price-to-Sales PS
  Price-to-Net Tangible Asset Value PS
  Price-to-Cash PS
  Net Working Capital PS
  Price Pct to Working Capital
  Average PE
  Earnings Yield
  Years in Average
  PE to PE Average

Price-Quality (PQ) Ratio

Price-Quality (PQ) ratio, is a measure of how expensive the cashflow that a company generates is, compared to its market price, then adjusted to reflect its degree of gearing, and finally adjusted to account for its amount of intangibles. The formula is:

(share price/cashflow PS) * [(total liabilities / (total assets - intangibles)] * Exponential(intangibles / total fixed assets)

In other words:
(how expensive the 'shop' is) * (how risky the 'shop' is) * (how much intangibles the 'shop' has)

Note: The greater the value of this ratio, the more expensive - given its quality - a company is.




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