In this tutorial, you will learn how to calculate the growth rate in Google Sheets.
How To Calculate Growth Rate in Google Sheets
Growth rate is a key financial concept that businesses use to measure their performance and track the progress of their business over time. Generally speaking, growth rate measures the percentage change of a particular value between two periods of time.
When applied to business, the growth rate is a critical metric since it can determine whether a company is expanding or contracting over a specific period.
There are several different ways to calculate growth rate of a company. One of the most common areas of business where growth rate is tracked is the total revenue a company generates in a particular timespan.
For example, the growth rate of revenue can be measured by subtracting the revenue of the earlier period from the revenue of the later period, and then dividing the difference by the earlier period’s revenue. This gives us the percentage change of revenue between the two periods.
In this guide, we will show you how to calculate the growth rate of revenue in a Google Sheets spreadsheet.
How To Find the Growth Rate in Google Sheets
Here’s how to find the growth rate in Google Sheets.
Step 1
First, we’ll need to set up a table that includes the net revenue of each period we are interested in tracking.
In our table above, we have two columns. One of these columns specifies the period while the other column holds the total net revenue generated during the corresponding period.
Step 2
Since we have nothing to compare the first period with, we will leave it with a blank growth rate.
For the second period, we will use the formula growth rate = (current revenue-previous revenue)/previous revenue. Ensure that the growth rate is formatted properly as a percentage.
In our example above, we’ve determined that the company’s profits experienced a growth rate of 40% from January to February.
Step 3
We can then drag the formula down to find the growth rate of each period.
Step 4
We can use the AVERAGE function to find the average revenue growth rate throughout the year.
In our example above, we’ve determined that our net revenue has experienced an average growth rate of 9.77% every month.
Summary
This guide should be everything you need to calculate the growth rate in Google Sheets.
You may make a copy of this example spreadsheet to test it out on your own.