Sequential Growth

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DEFINITION of 'Sequential Growth'

A measure of a company's short-term financial performance that compares the results achieved in a recent period to those of the period immediately preceding it. In financial reporting, sequential growth often compares the results between two quarters. A company might be reported to have experienced 3% sequential sales growth - this means that its revenue has increased by 3% since the previous quarter.

INVESTOPEDIA EXPLAINS 'Sequential Growth'

When considering how much weight to place on reports of sequential growth (or the lack thereof), it is important to keep in mind that seasonal fluctuations often affect a company's short-term performance.





A major retailer might report 10% sequential growth in the fourth quarter, then see a relative decline in revenue in the first quarter of the following year. This would not necessarily indicate that the business is performing poorly - it could simply be the result of increased consumer spending during the holiday spending followed by a return to normal spending in the new year. It is important to look at a variety of indicators to get an accurate picture of a company's performance.

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