Earnings growth

Also called: earnings growth, profit growth

How much profit grew compared with the year before.

Formula

Growth = (This year's earnings ÷ Last year's earnings) − 1

Worked example

1. This year's net income = $1.5bn
2. Last year's net income = $1.3bn
3. ($1.5bn ÷ $1.3bn) − 1

Result: +15.4%

How to read it

Earnings growth is what ultimately drives share prices over long periods. Per-share growth (EPS) also reflects buybacks.

Worked example uses made-up figures for 'Example plc'

See it with real numbers: Any company page → (free account)