Calculation method: (total assets at the end of the period-total assets at the beginning) ÷ total assets at the beginning.
The assets owned by the company are the material basis for the company's survival and development, and the basic performance of the company in the expansion period is expansion.
This expansion usually comes from two reasons:
One is the increase of owner's equity.
The second is the expansion of corporate debt.
For the former, if the owner's equity is greatly increased due to the company's issuance of shares, investors need to pay attention to the use of raised funds. If the raised funds are still in monetary form or used for entrusted wealth management, the growth rate reflected by the growth rate of such total assets will be greatly reduced; For the latter, companies often borrow from banks or issue bonds when funds are scarce, and idle funds will be less, but limited by capital structure. When the company's asset-liability ratio is high, there is limited room for debt scale expansion.
2. Look at the growth rate of fixed assets
Calculation method: (total fixed assets at the end of the period-total fixed assets at the beginning) ÷ total fixed assets at the beginning.
For productive enterprises, the growth of fixed assets reflects the expansion of the company's production capacity, especially in industries with supply gaps. The expansion of production capacity directly means the company's future performance growth.
When analyzing the growth of fixed assets, investors need to analyze the composition of the increased fixed assets. Most of the added fixed assets are still under construction, so investors need to pay attention to their expected completion time. When they are completed, they will definitely have a significant impact on the current profits. If the added fixed assets have been completed earlier this year, the effect has been basically reflected in the current statements, and it is unrealistic for investors to hope that their expected annualized expected returns will increase significantly in the future.
3. Look at the growth rate of main business income
Calculation method: (main business income in the current period-main business income in the previous period) ÷ main business income in the previous period.
Usually, companies with growth are mostly companies with prominent main business and relatively single operation. The high growth rate of main business income shows that the company has a large market demand for products and strong business expansion ability. If a company can keep the growth rate of its main business income above 30% for several years in a row, it can basically be considered that the company has growth.
4. Look at the growth rate of main profit.
Calculation method: (profit of main business in the current period-profit of main business in the previous period) ÷ profit of main business in the previous period.
Generally speaking, companies whose main profits grow steadily and account for an increase in the proportion of total profits are in the growth stage.
Although the total profit of some companies increased significantly during the year, the profit of main business did not increase correspondingly, or even decreased significantly. The quality of such companies is not high, and it is especially necessary to be vigilant when investing in such companies. There may be huge risks, and there may also be problems such as high asset management costs.
5. Look at the growth rate of net profit
Calculation method: (net profit of this year-net profit of the previous year) ÷ net profit of the previous period.
Net profit is the final result of the company's operating performance. The sustained growth of net profit is the basic feature of the company's growth. For example, its large increase shows that the company's operating performance is outstanding and its market competitiveness is strong. On the other hand, if the net profit growth is very small, even negative, it is not growth.
When analyzing the company's growth, we should also consider some other related factors. From more aspects, the analysis is more comprehensive, the results are more accurate, and it is more conducive to the choice of stock trading.