How to analyze the main indicators of company growth

The purpose of company growth analysis is to observe the development of business capacity of enterprises in a certain period of time. Growth ratio is an important indicator to measure the development speed of a company, and it is also an important ratio often used in ratio analysis method. So how to analyze the main index of company growth?

1. Growth rate of total assets
The growth rate of total assets is the difference between the total assets at the end of the spot minus the total assets at the beginning of the period divided by the ratio of the total assets at the beginning of the period. The assets owned by the company are the material basis for the development of the company. In the period of expansion, the basic performance of the company is the expansion of its scale. This expansion generally comes from two reasons: one is the increase of owners' equity, the other is the expansion of the company's debt scale. For the former, if the owners' equity is greatly increased due to the company's issuance of shares, investors should pay attention to the use of the raised funds. If the raised funds are still in monetary form or used as entrusted financial management, the growth reflected by the growth rate of such total assets will be greatly reduced *; for the latter, the company often borrows from the bank or issues bonds when the fund is in short supply, The situation of idle capital will be less, but it is limited by the capital structure. When the company's asset liability ratio is high, the expansion space of debt scale is limited.
2. Growth rate of fixed assets
The growth rate of fixed assets is the ratio of the difference between the total fixed assets at the end of the spot minus the total fixed assets at the beginning of the period divided by the total fixed assets at the beginning of the period. For productive enterprises, the growth of fixed assets reflects the expansion of the company's capacity, especially in industries with supply gap. The expansion of production capacity directly means the growth of the company's future performance. When analyzing the growth of fixed assets, investors need to analyze the composition of the growing part of fixed assets. For most of the increased fixed assets are still under construction, investors need to pay attention to the expected completion time, which will have a significant impact on the current profit of the completed project; if the increased fixed assets have been completed in the earlier months of this year, Then the effect has been basically reflected in the current financial statements. It is unrealistic for investors to hope that their future earnings will increase significantly on this basis.
3. Growth rate of main business income
The growth rate of main business income is the difference between the main business income of the current period minus the main business income of the previous period, and then divide the ratio of the main business income of the previous period. Usually, most of the companies with growth are companies with outstanding main business and single operation. The high growth rate of main business income shows that the market demand of the company's products is large and the business expansion ability is strong. If a company can maintain a growth rate of more than 30% of the main business income for several consecutive years, it can be considered that the company has growth potential.
4. Growth rate of main business profit
The growth rate of the main business profit is the ratio of the difference between the main business profit of the current period minus the main business profit of the previous period and the main business profit of the previous period. Generally speaking, the company with stable growth of main profit and its proportion in total profit is in the growth period. Although the total profits of some companies have increased by a large margin, the profits of their main businesses have not increased correspondingly or even dropped sharply. The quality of such companies is not high. It is particularly necessary to be vigilant when investing in such companies. There may be huge risks here, and there may also be high asset management costs.
5. Net profit growth rate
The growth rate of net profit is the ratio of the difference between the net profit of the current year minus that of the previous year and the net profit of the previous period. Net profit is the final result of the company's operating performance. The continuous growth of net profit is the basic characteristic of the company's growth. If the increase is large, it indicates that the company has outstanding business performance and strong market competitiveness. On the contrary, the growth rate of net profit is small and even negative growth is not growth.

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