Growth Rate

Growth rate means the percentage increase or decrease of a number over time. In simple terms, growth rate shows how fast something is growing or shrinking. Growth rate is important because investors use it to measure business momentum. Revenue growth, earnings growth, user growth, and market growth can all affect valuation and investor confidence. For example, if revenue rises from $100 million to $120 million, the growth rate is 20%. Growth rate is not the same as total size. A small company can have a high growth rate, while a large company can grow more slowly but still generate more total revenue.