Research Quotient

Is it possible to derive the research quotient using this system?
Defined as:
Research Quotient = percentage increase in revenue from a 1% increase in R&D. RQ is the output elasticity of R&D. RQ offers a universal, uniform, and reliable measure of a firm’s R&D productivity.

Thanks
Tony

Not sure of the approache, but I’d guess you could take a set of companies and calculate the change in R&D and change in sales over a set of companies and run a regression to get the best fit. You’d need to run the regression externally though - at least I don’t know of a way to do a line of fit on p123.

LoopAvg(“Sales(ctr,Ann)/Sales(Ctr+1,Ann)-1”,5,0)/LoopAvg(“RandD(Ctr+1,Ann)/RandD(Ctr+2,Ann)-1”,5,0)

For most companies this is N/A since a huge number of companies report no RandD expenses, but the median for the companies which give values is 0.49. Which means that, on average, half of R&D spending actually results in proportional revenue increases.

One could use the Aggregate function combined with the formula above (as a custom formula) to calculate the total research quotient for a group of stocks.

wow. thanks