.fs-calc-container {
max-width: 800px;
margin: 0 auto;
padding: 20px;
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
background: #f9f9f9;
border-radius: 8px;
box-shadow: 0 4px 15px rgba(0,0,0,0.1);
}
.fs-calc-title {
text-align: center;
color: #2c3e50;
margin-bottom: 25px;
}
.fs-input-group {
margin-bottom: 15px;
background: #fff;
padding: 15px;
border-radius: 6px;
border: 1px solid #e1e1e1;
}
.fs-label {
display: block;
font-weight: 600;
margin-bottom: 8px;
color: #34495e;
}
.fs-sublabel {
display: block;
font-size: 0.85em;
color: #7f8c8d;
margin-bottom: 8px;
}
.fs-input {
width: 100%;
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
}
.fs-select {
width: 100%;
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
background-color: #fff;
}
.fs-btn {
width: 100%;
padding: 12px;
background-color: #27ae60;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
font-weight: bold;
cursor: pointer;
transition: background-color 0.3s;
margin-top: 10px;
}
.fs-btn:hover {
background-color: #219150;
}
.fs-result-box {
margin-top: 25px;
padding: 20px;
background-color: #ecf0f1;
border-left: 5px solid #27ae60;
border-radius: 4px;
display: none;
}
.fs-result-header {
font-size: 14px;
text-transform: uppercase;
color: #7f8c8d;
margin-bottom: 5px;
letter-spacing: 1px;
}
.fs-result-value {
font-size: 32px;
color: #2c3e50;
font-weight: 700;
}
.fs-explanation {
margin-top: 10px;
font-size: 14px;
color: #555;
line-height: 1.5;
}
.fs-article {
max-width: 800px;
margin: 40px auto;
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
line-height: 1.6;
color: #333;
}
.fs-article h2 {
color: #2c3e50;
border-bottom: 2px solid #eee;
padding-bottom: 10px;
margin-top: 30px;
}
.fs-article h3 {
color: #2c3e50;
margin-top: 25px;
}
.fs-article p {
margin-bottom: 15px;
}
.fs-article ul {
margin-bottom: 20px;
}
.fs-article li {
margin-bottom: 8px;
}
.fs-formula-box {
background: #f4f7f6;
padding: 15px;
border-radius: 5px;
font-family: monospace;
margin: 15px 0;
border: 1px solid #ddd;
}
.hidden {
display: none;
}
.error-msg {
color: #c0392b;
font-weight: bold;
margin-top: 10px;
display: none;
}
function toggleInputs() {
var mode = document.getElementById('calcMode').value;
var periodsContainer = document.getElementById('periodsContainer');
if (mode === 'cagr') {
periodsContainer.classList.remove('hidden');
} else {
periodsContainer.classList.add('hidden');
}
// Hide previous results when switching modes
document.getElementById('resultBox').style.display = 'none';
document.getElementById('errorDisplay').style.display = 'none';
}
function calculateGrowth() {
var mode = document.getElementById('calcMode').value;
var startVal = parseFloat(document.getElementById('startValue').value);
var endVal = parseFloat(document.getElementById('endValue').value);
var resultBox = document.getElementById('resultBox');
var resultPercentage = document.getElementById('resultPercentage');
var resultExplanation = document.getElementById('resultExplanation');
var errorDisplay = document.getElementById('errorDisplay');
// Reset Error
errorDisplay.style.display = 'none';
errorDisplay.innerHTML = "";
// Validation
if (isNaN(startVal) || isNaN(endVal)) {
errorDisplay.innerHTML = "Please enter valid numbers for Beginning and Ending values.";
errorDisplay.style.display = 'block';
resultBox.style.display = 'none';
return;
}
if (startVal === 0) {
errorDisplay.innerHTML = "Beginning value cannot be zero for growth calculations.";
errorDisplay.style.display = 'block';
resultBox.style.display = 'none';
return;
}
var growthRate = 0;
var explanation = "";
if (mode === 'simple') {
// Simple Growth Rate: ((End – Start) / Start) * 100
growthRate = ((endVal – startVal) / startVal) * 100;
explanation = "This represents the percentage increase or decrease from the beginning period to the ending period.";
} else {
// CAGR
var periods = parseFloat(document.getElementById('numPeriods').value);
if (isNaN(periods) || periods <= 0) {
errorDisplay.innerHTML = "Please enter a valid number of periods (greater than 0).";
errorDisplay.style.display = 'block';
resultBox.style.display = 'none';
return;
}
// CAGR specific validation: Start and End values must have the same sign and be positive for standard formula
if (startVal <= 0 || endVal <= 0) {
errorDisplay.innerHTML = "For standard CAGR calculations, both Beginning and Ending values must be positive numbers.";
errorDisplay.style.display = 'block';
resultBox.style.display = 'none';
return;
}
// CAGR Formula: ( (End / Start) ^ (1 / n) ) – 1
growthRate = (Math.pow((endVal / startVal), (1 / periods)) – 1) * 100;
explanation = "This is the Compound Annual Growth Rate (CAGR), representing the smoothed annualized gain over " + periods + " periods.";
}
// Display Result
resultPercentage.innerHTML = growthRate.toFixed(2) + "%";
resultExplanation.innerHTML = explanation;
resultBox.style.display = 'block';
}
How to Calculate Growth Rate from Financial Statements
Analyzing financial statements is a core skill for investors, business owners, and financial analysts. One of the most critical metrics derived from these documents is the growth rate. Whether you are looking at Revenue (Top Line), Net Income (Bottom Line), or Earnings Per Share (EPS), understanding how fast a company is expanding—or contracting—is vital for valuation and strategic planning.
Types of Growth Rates
There are two primary ways to measure growth in finance, depending on the time horizon you are analyzing:
- Simple Growth Rate (Period-over-Period): This measures the percentage change between two distinct periods, such as Year-over-Year (YoY) or Quarter-over-Quarter (QoQ).
- Compound Annual Growth Rate (CAGR): This measures the mean annual growth rate of an investment over a specified time period longer than one year. It smooths out the volatility of periodic returns.
1. Calculating Simple Growth Rate
The simple growth rate is typically used to compare the current fiscal year's performance against the previous year. You can find these numbers on the Income Statement.
Formula: ((Ending Value – Beginning Value) / Beginning Value) × 100
Example:
Imagine Company A reported Revenue of $5,000,000 in 2022 (Beginning Value) and $6,500,000 in 2023 (Ending Value).
Calculation: (($6,500,000 – $5,000,000) / $5,000,000) = 0.30 or 30% growth.
2. Calculating CAGR (Multi-Year Growth)
When analyzing a company's performance over 5 or 10 years, a simple average is often misleading because of the compounding effect. CAGR provides a geometric progression ratio that provides a constant rate of return over the time period.
Formula: ((Ending Value / Beginning Value) ^ (1 / n)) – 1
Where n is the number of years or periods.
Example:
Company B had Net Income of $1,000,000 in 2018. By 2023 (5 years later), Net Income grew to $2,000,000.
Calculation: ($2,000,000 / $1,000,000) ^ (1/5) – 1
= 2 ^ 0.2 – 1
= 1.1487 – 1
= 0.1487 or 14.87% CAGR.
Where to Find the Data
To use the calculator above, you need to extract specific line items from a company's financial reports (10-K or 10-Q):
- Revenue / Sales: Found at the top of the Income Statement. Indicates demand for products/services.
- Gross Profit: Revenue minus Cost of Goods Sold (COGS). Indicates production efficiency.
- Net Income: Found at the bottom of the Income Statement. Indicates total profitability after all expenses.
- EPS (Earnings Per Share): Often found below Net Income. Critical for shareholder value analysis.
- Free Cash Flow: Found on the Cash Flow Statement (Cash from Operations – Capital Expenditures).
Interpreting the Results
A positive growth rate generally signals a healthy, expanding company. However, context is key:
- Consistency: Is the growth volatile (e.g., +50% one year, -20% the next) or steady? CAGR helps identify steady growers.
- Sustainability: High growth rates (above 20%) are difficult to maintain indefinitely as companies mature.
- Comparison: Always compare the calculated growth rate against industry peers. A 5% growth rate might be low for a tech startup but excellent for a utility company.