Rule of 80 Calculator

How to Use the Rule of 80 Calculator

The Rule of 80 Calculator helps you estimate the age at which a company's growth rate will decline based on its current earnings growth rate. Follow these steps to use the calculator:

1. Enter the Current Earnings Growth Rate in the input field. This is the percentage rate at which a company's earnings are growing.
2. Click the Calculate button to get the estimated age at which the company's growth rate will decline.
3. The result will be displayed in the Age at which growth rate will decline field.

Understanding the Rule of 80

The Rule of 80 is a simplified method used to estimate the age at which a company's growth rate will decline. According to this rule, if a company's earnings are growing at a rate of 80% or more per year, it is considered a high-growth company. If the growth rate falls below 80%, the company is considered to be entering a mature phase.

The formula used in this calculator is:

Age at which growth rate will decline = 80 / Current Earnings Growth Rate

This formula provides a quick way to estimate the age at which a company's growth rate will decline based on its current earnings growth rate.