It is an average growth of earnings over the period of time. For example, if a company earns $10,000 in the second quarter of year 1 and $12,000 in the second quarter of year 2, earnings growth was 20 percent.
Beware of the earnings growth in a new, start-up company. This can easily be misleading because earnings for a startup can be quite small. If a company earns only $1,000 in year 1 and $2,000 in year 2, earnings growth may be 100%, but it still is only $1,000. When looking at the possible investment aim for companies with steady and high earnings growth. For big and established companies earnings growth might be smaller, but higher dividends are to be expected.
