Alok Paul
The Revenue Growth Rate is a popular term for business organizations. It indicates how fast the company is growing. In this tutorial, we will show some techniques to calculate the revenue growth rate in Excel just in a few clicks.
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What is Revenue?
Revenue is the amount of income that is earned from a business.
It is calculated as:
It is the total cash flow of a business by a successful operation scheme.
What is the Revenue Growth Rate?
The revenue growth rate is the value of revenue changes over a period.
It is calculated as:
So, it is based on the difference between new revenue and previous revenue. The revenue growth rate is calculated for the same months of different years, month to month, or weekly basis.
3 Ways to Calculate Revenue Growth Rate in Excel
We will show some easy examples to calculate the revenue growth rate in Excel.
1. Calculate Monthly Revenue Growth
In this example, we will calculate the revenue growth from the dataset below.
We have a column named Revenue Growth Rate for calculation.
Step 1:
First, we will calculate the growth of the month of February compared with January.
- Go to Cell D6 and put the following formula.
=(C6-C5)/C5
Step 2:
- Now, press Enter.
We get a decimal value. We will convert this to the percentage format.
Step 3:
- Press the right button of the mouse.
- Click on the Format Cells from the list.
You can also go to the Format Cells option by applying the Keyboard Shortcut CTRL+1.
Step 4:
- Choose Percentage from the Number section.
- Then press OK.
We can decide how many digits will exist after the point.
Now, look at the result.
Step 5:
- Drag the Fill Handle icon then.
Finally, we get the Revenue growth for our dataset.
Read More: How to Calculate Monthly Growth Rate in Excel (2 Methods)
2. Alternate Way to Calculate Revenue Growth
We will perform the same operation using a different formula in this example. Just divide the new revenue by the previous revenue and subtract 1 from that value.
Step 1:
- Go to Cell D6.
- Put the formula below.
=C6/C5-1
Step 2:
- Then press Enter.
- Now, we will convert this decimal value into a percentile.
Step 3:
- Go to Number group from the Home tab.
- Select Percentage from the list.
Look at the dataset now.
Step 4:
- Pull the Fill Handle icon now.
We get the desired result now.
Related Content: How to Calculate Annual Growth Rate in Excel (3 Methods)
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3. Calculate Revenue Growth of Months over Years
We will compare the revenue of January, February, and March of the years 2019 and 2020. The following dataset will be used for this.
We add a row for calculation in the dataset.
Step 1:
- Move to Cell C9.
- Write the following formula.
=C6/C5-1
Step 2:
- Then, press Enter.
We get the growth rate.
Step 3:
- Pull the Fill Handle icon to the right side.
This is how we can calculate the growth rate of each month from different years.
Related Content: Calculate Year over Year Percentage Change in Excel (3 Easy Techniques)
Predict the Revenue Growth Depending on the Previous Values
We can predict the revenue of a month from the revenue of the last 12 months.
We will use the GROWTH function for this. This dataset will be used for this prediction.
We will calculate the revenue for January 2022.
Step 1:
- Go to Cell D17.
- Write the following formula.
=GROWTH(D5:D16,B5:B16,B17)
Step 2:
- Now, press the Enter button.
So easily we can predict the revenue of a month from the previous values.
Related Content: How to Calculate Dividend Growth Rate in Excel (3 Methods)
Things to Remember
- The revenue growth rate must be in percentile form.
- The GROWTH function is used for forecast purposes only.
Conclusion
In this article, we described how to calculate the revenue growth rate in Excel. We also showed how to predict the revenue depending on previous revenue. I hope this will satisfy your needs. Please have a look at our website Exceldemy.com and give your suggestions in the comment box.
