The calculation of net income growth rate unveils the extent to which a company’s net income has surged or plummeted over a given timeframe. For instance, a company might see a 10% increase in net income from 2020 to 2021.
Understanding net income growth rate is paramount for investors, analysts, and company management alike. It gauges a company’s financial performance, profitability, and growth potential. Historically, the advent of sophisticated accounting software has simplified the computation of this metric.