Microsoft Excel is a highly useful tool to investors who wish to calculate EPS growth rates over a lengthy time period.
By calculating EPS growth rates over a period of 6 years, you develop a more insightful understanding of a company’s long term earnings per share and financial growth rates. Your data explains short and long term trends in EPS growth, giving you precise, actionable data for future analysis.
Calculate EPS Growth with Microsoft Excel
We’ll use Microsoft Stock (MSFT) in this example.
1. First, open up Microsoft excel, and create 6 rows for every year. Then mark 2 columns, “MSFT EPS,” and “EPS growth rate.”
2. Once created, visit Moneycentral to extract the EPS numbers over the past 6 years for MSFT from MSFT’s 10 year income statement, and enter the EPS data from the past 6 years under the MSFT column in Excel 2003 (or whatever version you own).
3. Calculate the EPS growth every year since 2002 using the following formula:
B3 = The Current Year EPS
B2= Last year’s EPS
This will give you the EPS growth rate for 1 year period. Once you enter the formula for the first 3 rows, Excel will automatically calculate the percent growth rates from prior years for all subsequent rows.
Screenshot of Excel Growth Rates
It’s a good idea to become more familiar with Microsoft Excel if you haven’t already. Excel eliminates statistical miscalculations, presents actionable data in an organized manner, and allows you to document your research under 1 file.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.