APPENDIX B
Calculating Earned Growth
The illustrations on the following pages should help clarify the components of the earned growth calculation and their importance. Growth for every company results from the sum of its earned and bought revenues. By separating the two, we can better understand the quality and sustainability of the firm’s growth, thus improving our understanding of its future prospects. We also provide further instructions at the website, NetPromoterSystem.com, as well as an online earned growth calculator tool that we built to help guide the application of the ideas contained in these illustrations.
In figure B-1, the standard accounting process would show that the firm grew by 30 percent from revenues of $100 to $130 (this ...
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