How to Calculate Monthly Growth Rate in Excel (2 Methods)

We calculate the monthly growth rate to figure out how much our assets and investments are worth. Microsoft Excel makes this task easier. From our dataset, in this article, we’ll learn two quick and suitable ways to calculate the monthly growth rate in Excel with appropriate illustrations. Here’s an overview of the dataset for today’s task.

Introduction to the Monthly Growth Rate

Undoubtedly, calculating the month-over-month growth rate is an easy task. Subtract the first month from the second month, then divide by the previous month’s total to get Month-over-Month growth. You’ll get a percentage when you multiply the result by 100. Your Month-over-Month growth rate is expressed as a percentage. The Monthly Growth Rate(MGR) formula is,

MGR = ((Y -X)/ Y)*100%

Where,

X = First Month’s Total

Y = Second Month’s Total

By applying the above formula, we also can calculate the week-over-week growth rate or year-over-year growth rate.

How to Calculate Monthly Growth Rate in Excel: 2 Methods

1. Use the Linear Formula to Calculate Monthly Growth Rate in Excel

Let’s say, we have a dataset that contains information about Sales in several months. We can calculate the month-over-month growth rate by applying the Linear formula in Excel. From our dataset, we’ll calculate the linear monthly growth rate. Let’s follow the instructions below to learn!

Step 1:

First, select cell D6 to calculate the monthly growth rate.

Hence, write down the below formula in the Formula Bar. The formula is,

=(C6-C5)/C6

Where C6 is the total sale in February and C5 is the total sale in January.

After that, simply press Enter on your keyboard, and you will get 0.30 as the return of the formula.

Step 2:

Further, place your cursor on the bottom-right on cell D6, and an AutoFill sign will appear in front of you.

After that, drag the AutoFill sign downward, and you will get your desired output which has been given in the below screenshot.

Step 3:

Now, look at our dataset, you will see that the formula returns a fraction value. We will convert these fraction values into a percentage. To do that, from the Home tab, go to,

Home → Number → Percentage

Finally, after completing the above process, you will get the monthly growth rate.

Step 4:

Here’s the graphical representation of our monthly growth rate.

2. Apply the Compound Interest Rate Formula to Calculate Monthly Growth Rate in Excel

In this method, we will calculate the compounded monthly growth rate. The formula of the Compounded Monthly Growth Rate(CMGR) is,

CMGR =( Last Month/ First month)^(1/ Month Difference) - 1

Let’s follow the steps below to calculate the compounded monthly growth rate.

Step 1:

First of all, select cell D5 to calculate the compounded monthly growth rate.

After that, write down the below formula in the Formula Bar. The formula is,

=((C16/C5)^(1/(12-1)))-1

Where C16 is the total sale in December and C5 is the total sale in January.

Hence, press Enter on your keyboard, and you will get 0.060648419 as the return of the formula.

Step 2:

Further, look at our dataset, and you will see that the formula returns a fraction value. We will convert these fraction values into a percentage. To do that, from your Home tab, go to,

Home → Number → Percentage

Finally, you will be able to calculate the compounded monthly growth rate. The compounded monthly growth rate is 6.06%.

Similarly, you can also calculate the annual growth rate in Excel.

Related Content: How to Calculate Dividend Growth Rate in Excel

Things to Remember

👉 The formula returns you a fraction value, then converts it into a percentage for calculating the monthly growth rate.

Download Practice Workbook

Download this practice workbook to exercise while you are reading this article.

Monthly Growth Rate.xlsx

Conclusion

I hope all of the suitable methods mentioned above to calculate the monthly growth rate will now provoke you to apply them in your Excel spreadsheets with more productivity. You are most welcome to feel free to comment if you have any questions or queries.

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