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Two additional barometers of success are a company’s growth in earnings and growth of equity:

 Look at the growth in earnings in Table 2-1. The earnings grew from $7,000 (in 2019) to $12,000 (in 2020), a percentage increase of 71 percent ($12,000 minus $7,000 equals $5,000, and $5,000 divided by $7,000 is 71 percent), which is excellent. At a minimum, earnings growth should be equal to or better than the rate of inflation, but because that’s not always a reliable number, I like at least 10 percent.

 In Table 2-2, Grobaby’s equity grew by $5,000 (from $35,000 to $40,000), or 14.3 percent ($5,000 divided by $35,000), which is very good — management is doing good things here. You want to see equity increasing by 10 percent or more.