by Rosalina William
Analyzing how much a company’s sales and profits are growing is crucial for investors. In this guide, we’ll break down revenue and earnings growth, use examples from a stock like Infosys Limited (INFY), compare growth to industry standards, and show how Stocksphi makes this analysis easier.
Definition: Revenue growth shows how much a company’s sales have increased over time.
Formula: Revenue Growth = (Current Revenue — Previous Revenue) / (Previous Revenue) × 100
Example: If INFY’s revenue was INR 80,000 crore last year and INR 90,000 crore this year, the revenue growth is 12.5%.
2. Earnings Growth:
Definition: Earnings growth reveals how much a company’s profits have grown.
Formula: Earnings Growth =(Current Earnings — Previous Earnings) / (Previous Earnings) × 100
Example: If INFY’s earnings were INR 15,000 crore last year and INR 18,000 crore this year, the earnings growth is 20%.
Investors compare a company’s growth to industry averages to see how well it’s doing compared to competitors. For instance, if INFY’s revenue growth is 12.5% and the industry average is 10%, INFY is performing better than its peers.
Data Aggregation: Stocksphi gathers financial data from various sources, giving investors a comprehensive view for analysis.
Automated Calculations: Stocksphi automatically calculates growth rates, saving time and ensuring accuracy.
Benchmarking Tools: Stocksphi compares a company’s growth with industry averages, aiding in decision- making.
Trend Analysis: Investors can track growth trends over time using Stocksphi, spotting opportunities.
Conclusion: Analyzing revenue and earnings growth helps investors gauge a company’s financial health. By understanding growth components, comparing to industry standards, and using Stocksphi’s tools, investors can make smarter decisions in the stock market.