You're welcome.
I understand that the regression curve does not fit the actual data
as you mentioned so its difficult to say with confidence that this
"trend" is accurate.
No, it isn't difficult, IMHO. That's what RSQ tells us: since it is
close to 1, the regression curve __does__ fit the data closely. Ergo,
the trend of the regression curve is the trend of the data. That's
the whole
point of "trend"lines.
Strictly speaking, there are some caveats to add. But the irony is:
you were quick to accept the linear "trend" of the regression curve
that hardly fit your monthly data points at all, but you express some
doubt about a regression curve that fits the data closely (at least,
one interpretation of it). Klunk!
More data is needed but comparison to prior periods is impossible
since the business underwent significant changes in operations.
Fair enough; I prefer to be conservative myself. So, what you __can__
say at this point is that revenue increased by a constant amount,
which is the average increase per month. Caveat: Since the data
track a linear regression curve, you cannot say that revenue is
increasing by a constant rate (i.e. x%). If you graph something that
increasing at a constant rate, you will see an exponential trend, not
a linear trend.
One last thing: how do you get this data into Excel RSQ?
That requires x- and y- values.
The Help description is confusing, IMHO. In many such functions,
"known_y" values are derived from "known_x" values. That is,
"known_x" values are on the X axis, and "known_y" values are on the Y
axis.
That is not the case for RSQ. In this case, "known_y" and "known_x"
are simply to sets of data (not directly related) whose correlation is
to be determined. By "not directly related", I mean: known_y is not
derived from known_x or vice versa.
So if your original data is in A2:A13, and the corresponding data
derived from the average revenue growth amount is in C2:C13, you could
write =RSQ(A2:A13, C2:C13).
I could see using revenue and EBITDA as the two variables,
but you seemed to imply that it could be done, and I did not
provide EBITDA.
I was talking about correlating the actual cumulative revenue data to
the estimated cumulative revenue data based on the average change per
month. If A14 is =AVERAGE(A3:A13) and C2 is =A2, then C3 is =C2+$A$4,
which you can copy down through C13.
(You should see that C13 is about the same as A13, subject to
difference in decimal places to the far right due to round-off error
inherent in all binary computer arithmetic.)
A close correlation simply means that you could simplify things and
use the average instead of the regression curve computed by the TREND
function or the Chart trendline option.
This goes far beyond any Excel question. You are asking questions
about rudimentary statistical inference. I suggest that you read a
book or take a class on introductory statistics, or read some of the
many web sites that offer introductory statistics, or defer to someone
in your company or nearby to tutor your or handle the statistical
analysis.