Glossary

Metric

Earnings Growth

How fast bottom-line profit is expanding year over year.

Formula

(Current Net Income − Prior Net Income) ÷ Prior Net Income

Definition

Earnings growth measures the change in net income across reporting periods. It's typically viewed over multiple years to smooth out cyclical noise.

Why it matters

Long-term stock returns tend to follow earnings growth. Consistency matters more than single-year spikes, since steady compounders build wealth.

Building blocks

Net Income
Final profit left after all costs, interest, and taxes.

Educational information only, not investment advice. Turtleway helps you understand what a metric or concept means; it does not tell you what to buy or sell.