Valuation Terms
Growth Rate
The pace at which a company’s revenue, earnings, or cash flow increases or decreases over time.
Also called: growth
What it means
Growth rate measures how quickly a business metric changes from one period to another. It can be applied to revenue, earnings, cash flow, dividends, or other figures. Growth can be strong, slow, flat, or negative.
Why it matters
Valuation depends heavily on growth expectations, so users need to understand both current growth and how durable it may be.