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Step 3 of 11

How to look at growth

Is the business getting bigger, and how steadily?

Click any word with a dotted underline to see what it means.

Growth tells you whether a company is selling more over time. It is usually the first number to check, because a business needs customers buying more in order to expand.

What to look at

  • over five years: is the line going up, staying flat or going down?
  • year by year: is it steady, speeding up or slowing down?
  • Where the growth comes from: the revenue split by shows which parts of the business bring in the money.

Questions to ask yourself

  • Is growth coming from many customers and products, or mostly from one?
  • Did one unusual year, such as a large acquisition or a one-time event, change the picture?
  • Is profit growing along with revenue, or is growth costing more and more?

Keep in mind

Fast growth isn't automatically better than slow growth. Mature companies often grow slowly while producing steady profits, and young companies can grow fast while losing money. Growth also tends to slow down as a company gets bigger.

On StockLab

Revenue, Revenue Growth and the five-year trend chart are in the Simple View, along with the for growth.