Growth Rate (GR%)

The growth rate of a share is an important investment criterion, but it clearly has to relate to the prospective PER and the consistency and sustainability of the future earnings stream. If REFS has given a company a PEG, this means that there are at least four years of consecutive earnings growth made or forecast. The company can then be classified as a growth share and the growth rate becomes a much more meaningful figure.

When future estimates are available, these are indicated by the letters 'pr' in brackets and growth rates are based on the consensus forecast for the 12 months following the calculation date.

If no future estimates are available, the growth rate is based upon the average growth in historic normalised EPS over the last two years. However, if the growth in the second year is less than the first, the second and most recent year's EPS growth is used instead.

As with normalised EPS, PERs, PEGs and DYs, the growth rate is calculated by apportioning the figures from the current and following financial periods covered by estimates, the aim being to show the rate of growth for the 12 months immediately ahead.