What is a growth ratio?

Profit is vital for any company. We have learned several profitability ratios in our last unit. However, the growth of a company indicates how its business is growing from one period to another. Therefore, in this unit, we will discuss growth ratios. What are Growth Ratios? Growth ratios indicate how fast a company or its business is growing.

What are the most common growth rate metrics?

Some of the most common growth rate metrics investors and analysts consider in evaluating a company's future prospects and suitability as an investment are revenues and earnings, the price-to-earnings (P/E) ratio, the price-to-earnings-to-growth (PEG) ratio, and return on equity (ROE).

What is net sales growth ratio?

These ratios measure the rate at which the company is growing. Net Sales Growth (%): Net sales are the total sales of an organisation minus the return inwards, discounts etc. This ratio helps in checking whether the company is on a growth trajectory or not compared to the previous year.