Future Growth Calculation: Methods & Examples

You can calculate the future growth of a stock by comparing past and future values.

By knowing a starting and ending value, you can calculate the future growth of an investment, population or any variable figure. The figure is usually quoted as a percentage, which allows easy comparison to values of a dissimilar scale. You might wish to know the growth rate of a population given present and historical data. Or maybe you wish to calculate the growth of a stock based on present earnings per share (EPS) and those estimated for a future quarter. Whatever the subject matter, the calculation remains the same.

Step 1

Reference the necessary data. All you need are figures from two time frames to perform the calculation. As an example, suppose you wanted to calculate the future growth of a stock. This quarter's EPS is $0.50, and you have heard rumors that the expected EPS for the next quarter will be $0.80.

Step 2

Use the formula:

Growth = [(Future Value - Current Value) / Current Value] x 100

Step 3

Plug in your data:

Future Growth = [($0.80 - $0.50) / $0.50] x 100 Future Growth = [$0.30 / $0.50] x 100 Future Growth = 0.60 x 100 Future Growth = 60%