Definition of Growth company:
A growth company is any company whose business generates significant positive cash flows or earnings, which increase at significantly faster rates than the overall economy. A growth company tends to have very profitable reinvestment opportunities for its own retained earnings. Thus, it typically pays little to no dividends to stockholders opting instead to put most or all of its profits back into its expanding business.
A company that is growing rapidly in comparison to other companies in its field or the economy as a whole.
A company that is considered a leader in the industry based on a stronger level of growth than other companies in the same field. Significant levels of cash flow and earnings compared to other companies are used to determine if a company falls into this category. Growth companies typically have something whether it is an innovative product or a service that draws in more consumers. The stock price of publicly-traded growth companies typically increases at a rapid pace.
Growth companies have characterized the technology industries. The quintessential example of a growth company is Google, which has grown revenues, cash flows, and earnings substantially since its initial public offering (IPO). Growth companies such as Google are expected to increase their profits markedly in the future; thus, the market bids up their share prices to high valuations. This contrasts with mature companies, such as utility companies, which tend to report stable earnings with little to no growth.
How to use Growth company in a sentence?
- We pride ourselves on being a growth company in an industry that isnt growing.
Meaning of Growth company & Growth company Definition