• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint

Crunching the Numbers

How different are growth rates across the market and what is a high growth rate? To answer these questions, you will need to look at the entire market and examine both past growth in earnings and expected future earnings growth rates. A legitimate follow-up question to this would be to wonder how the market prices grow; you can answer this question by comparing the PE ratios for companies with different expected growth rates.

Across the Market

In a market as large and diverse as the United States, it should come as no surprise that there are large differences in earnings growth across companies. This is true whether you look at past growth in earnings (historical growth) or at expected future growth. In Figure 7.5, you can see the distribution of earnings growth across U.S. companies for both past and future growth in earnings per share in early 2002.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint