Revenue Growth
The rate at which a company's sales increase from one period to the next.
Formula
Revenue Growth = (Current Period Revenue - Prior Period Revenue) / Prior Period Revenue x 100
Unit
%
In depth
Revenue growth is the least manipulable growth measure and the first thing to check, because profit growth without revenue growth eventually runs out of costs to cut. Splitting it into volume and price is the analysis that matters: volume growth means the business is winning customers, while price growth may simply be inflation being passed through. Growth bought through longer credit terms shows up as revenue rising and receivables rising faster, which is why the two must be read together. Acquisitions inflate reported growth, so organic growth is the figure to compare across years.
Worked example
Revenue rises 10% from ₹1,000 crore to ₹1,100 crore while receivables rise 60% from ₹220 crore to ₹352 crore. Debtor days go from 80 to 117, so the ₹100 crore of extra revenue arrived with ₹132 crore of extra unpaid bills.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Revenue Growth” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.