Price-to-innovation-adjusted cash flow is a variation of the price-to-cash-flow ratio that takes a company's level of spending on research and development into account. Price-to-innovation-adjusted cash flow is calculated by adding any expenditure on R&D back into operating cash flow and then calculating the PCF ratio for that company.

Accounting standards require that R&D costs are categorized as expenses, which can diminish the book value of innovative companies in industries such as software development and biotech. R&D expenditures do not necessarily guarantee future innovative success, but R&D spending is regarded as a crucial part of innovation and technological advancement.

The price-to-innovation-adjusted cash flow calculation is extremely useful when evaluating company performance in industries such as software development, pharmaceuticals, and computers. In fact, some technology companies reinvest a significant portion of generated cash back into R&D, because they consider it as an investment in their continued growth. Heavy expenditures on R&D shows that a company is willing to take risks to further its growth.

Note: R&D has a fallback to previous period during preliminary. If NA after the fallback, or NA for TTM & Q with complete data then fallback to the closest annual
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