Price-Quality (PQ) RatioPrice-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.