Operating Income Growth Rate is a fundamental financial metric that measures the annual rate of change in a company's operating income. Operating income, also known as EBIT (Earnings Before Interest and Taxes), is a company's revenue minus all of its operating expenses. The operating income growth rate is a critical measure of a company's financial performance and is widely used in fundamental analysis to evaluate a company's profitability and potential for future growth.

The formula for calculating operating income growth rate is:

Operating Income Growth Rate = (Operating Income This Year - Operating Income Last Year) / Operating Income Last Year x 100%

For example, if a company had operating income of $100,000 in the previous year and its operating income increased to $120,000 in the current year, then the operating income growth rate would be:

Operating Income Growth Rate = ($120,000 - $100,000) / $100,000 x 100% = 20%

A positive operating income growth rate indicates that a company has grown its operating income, while a negative growth rate suggests that a company's operating income has declined.

Operating income growth rate can be used to compare a company's performance over multiple periods. It helps investors to identify trends and to evaluate a company's long-term financial performance. A higher growth rate typically shows that a company is growing and expanding, while a lower growth rate suggests the company is experiencing financial challenges or has reached a stable level.

In summary, operating income growth rate is a key financial metric that investors utilize in evaluating a company's profitability and potential for future growth.