Growth

Definition: 

The increase in a firm’s revenue and market share. 

Growth requires long-term investment and a sacrifice of short-term profitability (profits usually reinvested back into growth of the business— in the hope of making larger profits later).

Firms can grow through acquiring other firms, expanding into new markets, increasing output capacity, acquiring equity / debt finance to make asset purchases / capital investments.

Statements and Ratios:

Measured mainly by revenue levels on the Income Statement.

No ratios related to Growth in this course.