Growth rate of number of issued shares
factor.formula
Linear regression is performed with annual outstanding shares as the dependent variable and time as the independent variable:
Calculate the growth rate of the number of issued shares:
in:
- :
The total number of annual outstanding shares in year t, in shares.
- :
Time variable, with values of {1, 2, 3, 4, 5}, representing the past five years.
- :
The intercept term of the linear regression model represents the initial number of shares issued, in shares.
- :
The slope term of the linear regression model represents the average annual change in outstanding shares, expressed in shares/year.
- :
The residual term of the linear regression model represents the error term that cannot be explained by the model, and the unit is share.
- :
The arithmetic average of the annual outstanding shares in the past five years, in shares.
- :
The growth rate factor of the number of issued shares, dimensionless.
factor.explanation
This factor describes the speed of a company's equity expansion. A positive growth rate in the number of issued shares indicates that the company's equity expansion has slowed down over the past five years, which may mean that the company's demand for external financing has decreased, or that it is more inclined to support development through profit accumulation. A negative growth rate in the number of issued shares indicates that the company's equity expansion has accelerated over the past five years, which generally means that the company needs more external financing to support business growth. This factor can be used in conjunction with other growth factors and financial indicators to more comprehensively assess a company's growth and financial status. It should be noted that the calculation of this factor requires reliable historical equity data, and when conducting factor analysis, the temporal frequency of the data (year or quarter) should be considered.