How to Calculate Average Growth Rate in Excel (3 Easy Methods)

Knowing the annual growth rate is very important in financial data. Using the average growth rate and the annual average growth rate, we can determine where revenue is going from the start of the company. If you are looking for special tricks to calculate the average growth rate in Excel, you’ve come to the right place. There are numerous ways to calculate the average growth rate in Excel. This article will discuss the details of these methods. Let’s follow the complete guide to learn all of this.

Download Practice Workbook

Download this practice workbook to exercise while you are reading this article. It contains all the datasets in different spreadsheets for a clear understanding. Try it yourself while you go through the step-by-step process.

Formula of Average Growth Rate

Growth Rate (AGR): To determine the long-term trends you can use the Growth Rate. Any investor can get an idea of whether the company is growing or not. Growth rate can measure profits or loss, cash flow expenses, etc.

In order to calculate average growth, we must use the average function or sum up the growth rates for all the time periods and divide the result by the number of terms.

3 Easy Methods to Calculate Average Growth Rate in Excel

The following section will use three effective and tricky methods to calculate the average growth rate in Excel. This section provides extensive details on these methods. You should learn and apply these to improve your thinking capability and Excel knowledge. We use the Microsoft Office 365 version here, but you can utilize any other version according to your preference.

1. Using Conventional Formula

Here we will demonstrate how to measure the Average Growth Rate (AGR) for your data in Excel. You can predict the average growth rate by factoring in the existing and upcoming investment value regarding the time period per year in Excel with AGR. Then we will sum up the growth rates for all the time periods and divide the result by the number of terms to get the value of the average growth rate. We can easily apply the above-mentioned formula to find the average growth rate for our dataset shown below.

Let’s walk through the following steps to calculate the average growth rate in Excel.

📌 Steps:

• First of all, select the cell you want to put the value in (cell D6).
• Then write down the following formula in it.

• Next, press Enter.
• Consequently, you will get the growth rate in cell D6.

• Then, drag the Fill Handle icon to fill the other cells with the formula.
• Therefore, you will get the following growth rate.

• Next, select the cell D17 and write down the following formula in it.

• Next, press Enter.
• Consequently, you will get the average growth rate in cell D17.

Read More: How to Calculate Average Percentage Increase in Excel

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2. Utilizing AVERAGE Function

Here will use another method to calculate the average growth rate in Excel. We will use the AVERAGE function here. For demonstration purposes, we will use the following dataset to calculate the average growth rate.

Let’s walk through the following steps to calculate the average growth rate in Excel.

📌 Steps:

• First of all, select the cell you want to put the value in (cell D6).
• Then write down the following formula in it.

• Next, press Enter.
• Consequently, you will get the growth rate in cell D6.

• Then, drag the Fill Handle icon to fill the other cells with the formula.
• Therefore, you will get the following growth rate.

• Next, select the cell D17 and write down the following formula in it.

• Next, press Enter.
• Consequently, you will get the average growth rate in cell D17.

Read More: How to Calculate Average Percentage Change in Excel (3 Simple Ways)

3. Applying LN Function

Here, we will calculate the average growth rate for a particular time period. Here we will use the LN function to calculate the average growth rate. The following formula will use for calculating the average growth rate.

We can easily apply this formula to find the average growth rate for our dataset shown below.

Let’s walk through the following steps to calculate the average growth rate for a particle time period in Excel.

📌 Steps:

• First of all, select the cell you want to put the value in (cell D15).
• Then write down the following formula in it.

• Next, press Enter.
• Consequently, you will get the growth rate in cell D15.

Read More: How to Calculate Percentage above Average in Excel (3 Easy Ways)

How to Calculate Average Annual Growth Rate in Excel

Here, we will illustrate how to calculate the annual average growth rate in Excel. For demonstration purposes, we will use the following dataset.

Let’s walk through the following steps to calculate the annual average growth rate in Excel.

📌 Steps:

• First of all, select the cell you want to put the value in (cell D6).
• Then write down the following formula in it.

• Next, press Enter.
• Consequently, you will get the annual growth rate in cell D6.

• Then, drag the Fill Handle icon to fill the other cells with the formula.
• Therefore, you will get the following annual growth rate.

• Next, select the cell D14 and write down the following formula in it.

• Next, press Enter.
• Consequently, you will get the annual average growth rate in cell D14.

💬 Things to Remember

✎ The first cash flow result is optional when calculating the Average Annual Growth Rate (AAGR).

✎ You can change the number format in Excel to the percentage format if you get the results in decimal format.

Conclusion

That’s the end of today’s session. I strongly believe that from now, you may be able to calculate the average growth rate in Excel. If you have any queries or recommendations, please share them in the comments section below.

Don’t forget to check our website Exceldemy.com for various Excel-related problems and solutions. Keep learning new methods and keep growing!