In order to calculate the growth rate for any financial indicator, it is enough to know its numerical expression at different points in time and be able to apply a simple formula.
Instructions
Step 1
Select the financial indicator, the growth rate of which you need to calculate. Remember that the growth rate shows in which direction the indicator has changed over time, so you need to know two values, for example, the size of gross revenues in 2010 and 2011.
Step 2
Calculate the growth rate. To do this, divide the indicator for the new period by the indicator for the previous period. Subtract 1 from the resulting value, multiply by 100%. For gross revenue, the formula looks like this:
(Gross Revenue 2011 / Gross Revenue 2010-1) * 100%.
Step 3
Do not confuse the growth rate with the growth rate, the latter is calculated using the formula:
(Gross Revenue 2011 / Gross Revenue 2010) * 100%.
The growth rate always has a positive sign, even if, for example, gross revenue (or any other financial indicator) fell from 100 conventional rubles in 2010 to 50 in 2011. The calculated growth rate is 50%, and the growth rate is -50% …
Step 4
Check yourself. Before calculating the growth rate, compare the financial indicators of the two periods. If the data of an earlier period is greater than that of a later one, it means that there has been a real reduction in the studied value, and the growth rate will be negative. On the contrary, if the indicator has grown over time, then the growth rate will have a positive sign.
Step 5
Please note that you can use the growth rate not only in cases where there are two consecutive values of the same financial indicator. The calculation of growth and growth rates is also carried out to compare data for a specific period of one year, for example, a month or a quarter, with data from the same period of the previous year. That is, you can see if the gross revenue of October 2011 has increased compared to the amount of gross revenue in October 2010.
