Organic Growth Rate Calculator
Calculate your company's true internal growth by excluding revenue from acquisitions.
Total revenue generated in the current year/quarter.
Revenue contributed by companies acquired during this period.
Total revenue generated in the previous year/quarter (baseline).
Organic Revenue (Adjusted):
$0.00
Total Growth Rate (Unadjusted):
0.00%
Organic Growth Rate:
0.00%
How to Calculate Organic Growth Rate
Organic growth rate is one of the most critical metrics for assessing the fundamental health of a business. Unlike total revenue growth, which can be artificially inflated through mergers and acquisitions (M&A), organic growth measures the increase in revenue generated internally by the company's existing operations.
The Formula
To calculate organic growth, you must strip away revenue generated from recent acquisitions to compare apples to apples with the prior period. The formula is:
Organic Growth Rate = ((Current Revenue - Acquisition Revenue) - Prior Revenue) / Prior Revenue × 100
Why It Matters
- Sustainability: It shows if customers actually like the product enough to buy more of it, rather than the company simply buying market share.
- Operational Efficiency: High organic growth indicates effective sales strategies, product-market fit, and customer retention.
- Valuation: Investors often pay a higher premium for companies with strong organic growth compared to those growing solely through acquisitions.
Example Calculation
Imagine a software company had $10,000,000 in revenue last year (Prior Period). This year, they report $15,000,000 in total revenue.
However, during this year, they bought a smaller competitor that contributed $3,000,000 to that total.
- Total Growth: ($15M – $10M) / $10M = 50% (Looks amazing!)
- Adjust for Acquisitions: $15M – $3M = $12M (This is the organic revenue).
- Organic Growth: ($12M – $10M) / $10M = 20%.
While the company grew 50% overall, their organic growth was 20%. This calculator helps you perform this specific adjustment instantly.