financial-growth

# Financial Growth

Retrieve and analyze comprehensive year-over-year growth in key financial metrics for public companies using Octagon MCP.

## Prerequisites

Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See [references/mcp-setup.md](references/mcp-setup.md) for installation instructions.

## Query Format

```
Retrieve year-over-year growth in key financial metrics for <TICKER>, limited to <N> records and filtered by period <FY|Q>.
```

**MCP Call:**

```json
{
  "server": "octagon-mcp",
  "toolName": "octagon-agent",
  "arguments": {
    "prompt": "Retrieve year-over-year growth in key financial metrics for AAPL, limited to 5 records and filtered by period FY"
  }
}
```

## Output Format

The agent returns a comprehensive table with YoY growth percentages:

| Fiscal Year | Revenue Growth (%) | Gross Profit Growth (%) | Operating Income Growth (%) | Net Income Growth (%) | EPS Growth (%) | Free Cash Flow Growth (%) |
|-------------|-------------------|------------------------|----------------------------|----------------------|----------------|--------------------------|
| 2025 | 6.43% | 8.04% | 7.98% | 19.50% | 22.59% | -5.73% |
| 2024 | 2.02% | 6.82% | 7.80% | -3.36% | -0.81% | 6.98% |
| 2023 | -2.80% | -0.96% | -4.30% | -2.81% | 0.16% | -10.64% |
| 2022 | 7.79% | 11.74% | 9.63% | 5.41% | 8.47% | 19.89% |
| 2021 | 33.26% | 45.62% | 64.36% | 64.92% | 71.30% | 26.70% |

**Data Source:** octagon-financials-agent

## Key Insights Pattern

After receiving data, generate insights:

1. **Peak performance years**: Identify years with highest growth across all metrics
2. **Earnings vs cash flow divergence**: Compare Net Income growth to FCF growth
3. **Margin trends**: Compare Gross Profit and Operating Income growth to Revenue
4. **EPS enhancement**: Note when EPS growth exceeds Net Income growth (buybacks)
5. **Challenging periods**: Flag years with broad-based declines

## Metrics Reference

| Metric | Definition |
|--------|------------|
| Revenue Growth | YoY change in total sales |
| Gross Profit Growth | YoY change in Revenue minus COGS |
| Operating Income Growth | YoY change in income from operations |
| Net Income Growth | YoY change in bottom-line profit |
| EPS Growth | YoY change in earnings per share |
| Free Cash Flow Growth | YoY change in operating cash flow minus capex |

## Analysis Tips

### Exceptional Growth Years
When all metrics show double-digit growth:
- Identify specific drivers (new products, markets, pricing)
- Assess sustainability of growth rate
- Compare to industry and competitors

### Earnings Quality Check
When Net Income Growth >> Free Cash Flow Growth:
- Potential working capital build
- Aggressive revenue recognition
- One-time items boosting earnings
- Investigate cash conversion

### Share Buyback Impact
When EPS Growth > Net Income Growth:
- Active share repurchase program
- Check shares outstanding trend
- Assess capital allocation priorities

### Margin Expansion
When Operating Income Growth > Revenue Growth:
- Operating leverage at work
- Cost discipline showing results
- Pricing power in action

### Contraction Periods
When multiple metrics decline:
- Identify root cause (demand, competition, costs)
- Check if industry-wide or company-specific
- Look for recovery signals in subsequent periods

## Follow-up Queries

Based on results, suggest deeper analysis:

- "What factors contributed to the significant [YEAR] growth spike?"
- "How did the [YEAR] downturn impact [COMPANY]'s long-term strategy?"
- "What explains the [YEAR] net income growth despite lower free cash flow?"
- "Compare [COMPANY]'s growth metrics to [PEER1] and [PEER2]"