Knowledge Centre
Earnings Growth Rate Formula
Earnings Growth Rate = {Total Earnings for a period minus Earnings for previous period/ Total Earnings Growth for Prior Period } x 100
For example: If the company’s Net Earnings in Year 1 and Year 2 were $200,000 and $240,00 respectively, then the Earnings Growth Rate in year 2 would be: $240,000 – $200,000 = $40,000 and $40,000 / $200,000 = .20 X 100 = 20 Percent Earnings Growth Rate.