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I am looking for the definition and explanation of the #5 Sales Growth R2 and #6 EPS Growth R2 on page 1 of the SSG.
Thanks,
Terry
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Rank: Advanced Member
Posts: 262
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Rank: Advanced Member
Posts: 105
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Alternatively, how about an explanation written in "english". :) In the context of the SSG Visual Analysis chart, r-squared is a measure of how consistent historical Sales and EPS growth has been. A value of 1 would indicate perfectly consistent growth (i.e., the historical growth appears on the chart as a perfectly straight line). The less consistent the growth, the further below 1 r-squared would be. In general, when r-squared is below about 0.90, the historical growth line won't look very straight.
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