Glossary / Fundamentals
Revenue growth
Also called: sales growth · top-line growth
Revenue growth is the change in a company's reported sales between two periods, expressed as a rate. It sits at the top of the income statement, before any cost, interest or tax line has been applied.
How it is measured
How is revenue growth measured?
Compare revenue in one reported period to revenue in an earlier one, most commonly the same quarter a year earlier so that seasonal patterns cancel. Organic growth strips out revenue acquired through acquisitions and the effect of currency moves; headline growth does not, and the two can differ substantially.
Why it matters
Why does revenue growth matter to a swing trader?
Revenue is the hardest of the major lines to flatter, because it sits above every discretionary cost and accounting choice further down the statement. That makes its direction a useful cross-check on profit growth: profit rising while revenue is flat describes cost reduction, which is finite, rather than expansion. The main distortion to watch for is acquisition — a company can report substantial headline growth while its existing business is static.
In Tapeline
Does Tapeline use revenue growth?
Revenue growth between reported periods is one of the five inputs to Tapeline's Fundamentals factor.
Tapeline publishes the six factor names and the ordering of their weights. The numeric weights, the scoring equation and the band edges are not published.
Related
See this in the product
What the Fundamentals factor measures · The Fundamentals factor · Full methodology
Related terms
Back to the full glossary.
General information about market vocabulary, written to be descriptive rather than prescriptive. Not investment advice — see the risk disclosure.