How do we define a company's growth rate?

ChaosNantuko answered 11 months ago …

I would define growth rate as growth of profits, as that's what really matters in a business. I would also keep an eye on revenue growth though, because if it doesn't keep up with profit growth, then the profit growth probably isn't sustainable. I would be very careful when examining growth of book value. Book value contains many assets that may change in market value drastically while not being accounted for in the book value measurement. Land for instance, is on the books as whatever the company purchased it for, instead of what its actually worth. This means that many companies currently have inflated book values, because they bought land when prices were high, and now that real estate prices have dropped, the value of that land has dropped as well.