how is revenue_growth calculated?

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how is revenue_growth calculated?

posted

Hi,

I try to see if I could mimic the calculation of revenue_growth from total_revenue. I try to directly do the calculation from quarter change also 1 year trailing revenue change. None of them actually align with the number that MorningStar gives directly.
Does anyone know how this revenue_growth calculated?

Thanks.

1 response

Thanks for the notebook, and highlighting this issue. It appears to be taking the quarter on quarter growth, except for every fourth quarter, when it uses quarter on same quarter prior year. This behaviour changed in 2014 when it changed to the latter every quarter. I think we must decide to use one of the following:

Quarter on quarter
Quarter on same quarter last year
Trailing 4 quarters on same figure for previous quarter

I recommend 2.

apple = data.groupby('revenue_growth_asof_date').first()  
apple['qoq_change_in_total_revenue'] = apple.total_revenue.pct_change()  
apple['yoy_change_in_total_revenue'] = apple.total_revenue.pct_change(4)  
apple

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.

In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.