Rifat Hassan
Sales growth percentage evaluates a company’s capability to earn revenue from sales over a specific time period. Nowadays, Microsoft Excel is a very useful tool to calculate the sales growth rate of any business with just a few clicks. This article will show you some easy ways to calculate the sales growth percentage in Excel.
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3 Easy Approaches to Calculate Sales Growth Percentage in Excel
In this tutorial, we will learn 3 easy approaches to calculate the sales growth percentage in Excel. We will explain each step in the methods with screenshots so that you can understand them easily. So, without further delay, let’s begin.
1. Calculate Sales Growth Percentage with Basic Formula
In this approach, we will use the basic formula to calculate the sales growth rate in Excel. The basic formula is below:
Sales Growth Rate =((Total Sales in this Period - Total Sales in the previous Period)/Total Sales in the Previous Period)*100
In order to apply this formula, we will use the dataset (B4:D10) below that contains the serial no. of months (B4:B10), Month Names (C5:C10) and Total Sales (D5:D10). However, the steps to find the growth rate of the Sales are below.
Steps:
- First of all, select a new column (E4:E10) where you want to keep the growth rate values.
- Consequently, we typed ‘Sales Growth’ as the heading of the new column.
- Then, select the second cell (E6) in the new column.
- Here, we are selecting the second cell because we do not have any growth rate for the first period of the interval.
- Therefore, to calculate the Sales Growth Percentage, enter the following growth rate formula in cell E6:
=(D6-D5)/D5
- After that, press the Enter key.
- As a result, you will get the output in cell E6.
- Now, to get the result in percentage format, first, select the cell that contains the result (E6).
- Afterward, go to the Home tab and find the Number group.
- Next, click on the % symbol.
- Eventually, you will get your desired Sales Growth Percentage.
- Now, drag the Fill Handle (the small Plus (+) sign on the right-bottom corner of the cell) through the whole column.
- Or, double-click on it.
- Thus, the other cells of the column will be automatically filled with the formula in ascending order of cell references (see screenshot).
- Like, cell E9 will have the formula:
=(D9-D8)/D8- Similarly, the formula in cell E10 will be:
=(D10-D9)/D9- And so on.
- In this way, we get the expected Sales Growth Percentage after each month.
Note:
Some of you may get the Sales Growth rates directly in the percentage format. But in most cases, you will get it in decimal format. In this case, just follow the steps shown previously to convert it into the percentage format.
Read More: How to Calculate Percentage of Sales in Excel (4 Examples)
2. Determine Annual Sales Growth Rate in Excel
Suppose, we have a dataset (B4:C10) in Excel containing some Years and the Total Sales in those years. Now, we want to determine the Annual Growth Rate of the Sales in cell C12. The steps to do so are below.
Steps:
- In the beginning, activate cell C12.
- Next, to find the Annual Growth Rate, insert the following formula in the cell:
=((C10-C5)^(1/5))-1
- After that, hit the Enter button.
- Thus, you will get the output (see screenshot).
- But, we can see that the result is in decimal format.
- Eventually, to get the result in percentage format, select cell C12 > go to the Home tab > find the Number group > click on the % symbol.
- In this way, you will get your desired result in percentage format (see screenshot).
Read More: How to Calculate Sales Growth over 3 Years in Excel (2 Methods)
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3. Use Excel GROWTH Function to Calculate Sales Growth Percentage
Excel provides a built-in function called GROWTH which analyzes a set of given data and can predict the output data based on the estimation. Let’s discuss it in detail for the following dataset.
The formula that the GROWTH function uses is :
Y=b*m^X
The GROWTH function takes four arguments:
- Known Y’s:
Let’s see the figure above. Here, for Month No. increasing from 1 to 6, we have 6 different Total Sales. For each Month No., we have a Total Sales amount. So, the Month No.s are the independent variables and the Total Sales depend on them. Hence, the Total Sales are the dependent variables or Known Y’s. However, It is an array of cells that is compulsory for the GROWTH function to work.
- Known X’s:
In the above screenshot, the independent variables Month No. are Known X’s. It is also an array of cells. But, it is not a compulsory part of the GROWTH function. If we do not provide it, Excel will assume them as 1…2…3… up to the total number of Known Y’s.
- New X’s:
New X’s are the independent variables for which we want to predict the Y’s. Like, if we want to predict the estimated sales of July by analyzing the data from January to June, then it will be the New X’s. It can be a single cell or an array.
- Constant:
The value of ‘b’ in the formula of the Growth function depends on this constant. It can be either TRUE or FALSE. If it is TRUE, Excel calculates the value of b and then uses it. On the other hand, if it is FALSE, Excel sets it as 1. When the parameter is missing, by default Excel assumes TRUE.
3.1 To Find out Sales Growth
Assuming, we have a dataset (B4:E10) in Excel. It contains the Sales in 2015, the Sales in 2016 and their corresponding Months (from January to June). Here, we will use the GROWTH function to find out the Growth of the Sales values in the E5:E10 range. See the following steps to do so.
Steps:
- In the first place, go to cell E5.
- Afterward, to calculate the Sales Growth, enter the formula below:
=GROWTH(D5:D10,C5:C10)
- Then. hit Enter.
- Finally, you will get all the Sales Growth values in the range E5:E10.
Read More: How to Calculate Growth Percentage Formula in Excel
3.2 Forecast Output Based on Estimation
Let’s say, we have a dataset (B4:D10) below containing some Years, their Serial No. and the values of Total Sales in those years. We can see that the Total Sales value in the Year 2015 is missing. Now, we will forecast the Total Sales in 2015 by estimating the data from the Year 2010 to 2014. We will use the GROWTH function for the estimation. The steps are below.
Steps:
- First, select cell D10 with a left-click on it.
- Secondly, insert the following formula to predict the Total Sales in 2015:
=GROWTH(D5:D9,C5:C9,C10)
- Thirdly, press the Enter button on the keyboard.
- In this way, you can estimate the Total Sales in 2015 (see screenshot).
Read More: How to Forecast Sales Growth Rate in Excel (6 Methods)
Things to Remember
While using the GROWTH function in Excel, we should always remember some important points. They are:
- In the GROWTH function, the length of the known X’s array must be equal to the known Y’s.
- The known Y’s array has to be greater than or equal to 0.
- If all the known X’s, known Y’s or new X’s are not numeric values, Excel will show Error.
Conclusion
I hope the above tutorial will be helpful for you to calculate the sales growth percentage in Excel. Download the practice workbook and give it a try. Let us know your feedback in the comment section. Follow our website ExcelDemy to get more articles like this.
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