[[Start here]] → [[expose to return drivers|drivers]] → multibagger equation --- The "Multibagger Equation" is a useful framework for understanding the three primary financial forces that power outstanding stock market performers: sales growth, operating margin expansion, and P/E ratio expansion. ![[understand multibaggers with the 2x2x2 equation.png]] When these three forces double, their compounded effect results in the share price increasing by a factor of eight. Obviously any other combination of growth in these forces can lead to multibaggers too. You can use this equation to screen for companies with strong sales growth prospects, the potential to improve margins, and favorable valuations, in the aim of substantial long-term gains. You can learn more about the financial engines of multibaggers at our [extensive guide on Stockopedia](https://www.stockopedia.com/academy/articles/financial-engines-of-multibaggers-introduction/).