Average Growth Rate

[Guest]

If I have a revenue number for 10 concescutive years, what is the best way to
get the average growth rate for these numbers? Thanks!

 

[Guest]

Calculate the revenue growth rate for each pair of consecutive years and then
average those rates.

 

[Guest]

Here's something more specific

1 $10,000,000.00
2 $14,740,634.86 47.41%
3 $16,736,647.04 13.54%
4 $16,922,847.13 1.11%
5 $18,653,648.44 10.23%
6 $26,127,105.88 40.06%
7 $33,074,355.97 26.59%
8 $42,284,677.94 27.85%
9 $42,545,480.92 0.62%
10 $49,387,299.55 16.08%

20.39%

Range is A1:c12.

C2 = B2/B1-1 etc, filled down to C10

C12 = AVERAGE(C2:C10) = 20.39% average growth rate.

Is that what you're looking for?

Dave

 

[Guest]

Dave F,

Thanks for your response. That does what I am looking for, although I was
looking for a formula that I could fit in one cell to accomplish it. Sorry
for not being more specific.

Thanks!

 

[James Silverton]

Hello, Dave!
You wrote on Wed, 25 Oct 2006 07:02:01 -0700:

DF> 1 $10,000,000.00
DF> 2 $14,740,634.86 47.41%
DF> 3 $16,736,647.04 13.54%
DF> 4 $16,922,847.13 1.11%
DF> 5 $18,653,648.44 10.23%
DF> 6 $26,127,105.88 40.06%
DF> 7 $33,074,355.97 26.59%
DF> 8 $42,284,677.94 27.85%
DF> 9 $42,545,480.92 0.62%
DF> 10 $49,387,299.55 16.08%

DF> 20.39%

DF> Range is A1:c12.

DF> C2 = B2/B1-1 etc, filled down to C10

DF> C12 = AVERAGE(C2:C10) = 20.39% average growth rate.

DF> Is that what you're looking for?

DF> Dave

Maybe an expoential increase would be appropriate? I'd have been
tempted to use:-
INDEX(LOGEST(known_y's,known_x's),1) -1

This would give 0.19052 or 19.05% with your data.


James Silverton
Potomac, Maryland

E-mail, with obvious alterations:
not.jim.silverton.at.comcast.not

 

[Guest]

According to this site, you can use AVERAGE as an array function:
https://www.exceltip.com/st/Calculating_Average_Annual_Growth/1096.html

Dave

 

[Guest]

I guess it depends on what your intent with the data is and what kind of
average you're looking to calculate.

I was assuming the original poster was looking for a simple mathematical
average of the population.

Dave

 

[David Biddulph]

If you want the number which applied in each of the 9 years would give the
same final value as you've got, then it's =(final/initial)^(1/9)-1.
With Dave F's figures of $10,000,000.00 growing to $49,387,299.55, the
answer is 19.42%, so not quite the same as his 20.39%. You can check it by
applying =previous*(1+percentage), & that gets you from $10,000,000.00 to
$49,387,299.55 in 9 steps.

 

[Fred Smith]

Although you can roll your own formula, the Rate function will do exactly what
you want. AS there are no cash flows, the intermediate values have no impact. So
use:

=RATE(9,0,-10000000,49387299.55)

=19.42%