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How to Calculate Company Sales Growth: A Practical Guide

Learn how to analyze and calculate sales growth to evaluate company performance and make smarter investment decisions.

Introduction

When deciding whether a business or a stock is worth investing in, one of the most important factors is sales growth. Revenue tells us how much a company earns, but sales growth reveals how consistently the business expands over time. In this article, we will walk through a simple analogy and then apply it to real-world financial reports.

Understanding Sales Growth with a Simple Analogy

The Bakso Business Example

Imagine you meet two bakso (meatball soup) vendors who want to sell part of their business, each valued at 20 million Rupiah. Which one should you buy? To decide, you ask them about their revenue over the past few years.

• Bakso A: Earned 10 million every year, consistently.
• Bakso B: Earned 6 million in 2015, growing steadily to 8.7 million in 2019.

Even though Bakso A earns slightly more now, Bakso B shows a growth trend of around 10% per year. Over time, this compounding growth can surpass Bakso A’s stagnant revenue. This is the essence of sales growth analysis.

Applying the Concept to Real Companies

Finding Sales Data in Financial Reports

Let’s apply the same principle to real businesses. Take HM Sampoerna (HMSP) as an example. To find their revenue, you look at the Income Statement (Laba Rugi) in the annual report.

In 2019, Sampoerna reported sales of 106 trillion Rupiah. The report specifies “stated in millions of Rupiah,” meaning 106,055 must be multiplied by 1 million. Comparing to 2018, revenue dropped slightly by 700 billion Rupiah.

Digging into Notes to Financial Statements

The financial statements include detailed notes. For revenue, the notes explain the breakdown between local and export sales, as well as machine-made vs. hand-rolled cigarettes. This additional context helps investors understand revenue composition, even if brand-level details aren’t disclosed.

Sales Growth Comparison Across Companies

To evaluate performance, you must compare companies within the same industry. Comparing Sampoerna with Gudang Garam, Wismilak, and Bentoel between 2014–2019 shows that Gudang Garam leads in sales growth, while Sampoerna ranked 3rd among the 4 companies analyzed.

Why Sales Growth Matters

• Predictability: A company with consistent growth gives better visibility for future performance.
• Investor Confidence: Growth attracts more investors, driving stock price appreciation.
• Competitive Advantage: Companies with higher growth than peers signal stronger demand and business strength.

“Revenue growth is not just about numbers; it’s about proving that the business model can scale over time.”

Conclusion

Sales growth is a simple yet powerful indicator for evaluating businesses. By checking not just revenue levels but also their growth trends, you can identify which companies are truly building long-term value. Whether you’re comparing bakso stalls or stock market giants, the principle remains the same: growth beats stagnation.

If you found this guide useful, share it with your network or leave a comment below with your thoughts on evaluating companies.

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Finance

References

• Video: Cara Hitung Pertumbuhan Penjualan Perusahaan
• Channel: Saham dari Nol
• Watch on YouTube