What is the Equity Growth Rate?

The Equity Growth rate is the rate at which a company is growing its equity. It is important to see that this number is steadily growing over time. This is one of the Rule #1 Big 5 Numbers required to determine whether a company may be a Rule #1 'wonderful business'.

Current Equity
Initial Equity
Age Equity

The Equity Growth Rate is:

0%

Using the research tool of your choice, locate historical Equity (or BVPS) numbers, going back 10 years if possible. Enter the oldest available number as your "Initial" Value. Enter the most recent number as your "Current" value. Then, in the "Age" box, enter a number of years (for example, if your oldest number is from 10 years ago and your newest is from this year, the total span of time between them is 9 years).

If you're using very large Equity numbers (i.e. $415,000,000) instead of BVPS ratio numbers with decimals in them, drop the zeros off the ends. Just be sure to drop the same number of zeroes off each dollar value you enter. Click 'Calculate' to get your result.

Next Steps

If these numbers are in line with Rule #1 requirements, move onto the Operating Cash Flow Growth Rate Calculator to finish determining if this business is right for you.

Cash Flow Growth Rate Calculator

Operating Cash Flow Growth Rate

This calculates the operating cash flow trend to see if there is enough predictability in the business.

Calculate Cash Flow
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