Meaning
Growth metrics summarize changes in revenue, profit or EPS versus a prior period.
Formula
(Current period value - prior period value) / prior period value
Practical reading
Growth is strongest when sales, earnings and cash flow improve together rather than only one metric moving up.
Calculation detail
Growth rate = (current value β prior comparable value) / prior comparable value Γ 100. The denominator matters: a very small or negative base can produce a percentage that is hard to interpret.
What to check
Examine revenue, earnings, EPS and cash flow together. Broad-based growth is generally more robust than a single rapidly moving line.
Limits and caveats
Year-on-year figures can be distorted by a cyclical trough, currency movements, divestitures or acquisitions.