Growth Rate Calculator for Excel
Calculated Results
Total Percentage Growth: 0%
Compound Annual Growth Rate (CAGR): 0%
Excel Formulas for these values:
Understanding Growth Rate Calculations in Excel
Calculating the growth rate is essential for tracking business performance, investment returns, or population changes. While there are several ways to define "growth," the two most common metrics used in professional Excel modeling are Simple Growth and CAGR (Compound Annual Growth Rate).
1. Simple Growth Rate Formula
The simple growth rate measures the percentage change from one period to the next. It is calculated by taking the difference between the final and initial values, then dividing by the initial value.
Excel Syntax: =(B2-A2)/A2 or =(B2/A2)-1
2. Compound Annual Growth Rate (CAGR)
CAGR is used when you want to find the smoothed annual growth rate over multiple periods. It eliminates the "noise" of year-to-year volatility and shows what the steady growth would have been if the rate were constant.
Excel Syntax: =((End_Value/Start_Value)^(1/Periods))-1
Realistic Example
Imagine your SaaS company's revenue started at 10,000 in Year 1 and grew to 25,000 by Year 4 (3 periods of growth).
| Metric | Value | Excel Formula |
|---|---|---|
| Initial Value | 10,000 | – |
| Final Value | 25,000 | – |
| Total Growth % | 150% | =(25000-10000)/10000 |
| CAGR (3 Years) | 35.72% | =(25000/10000)^(1/3)-1 |
How to Format Results in Excel
Once you enter the formulas above, Excel might display the result as a decimal (e.g., 0.3572). To make it look like a growth rate, you must format the cell as a percentage:
- Select the cell.
- Press Ctrl + Shift + % on your keyboard.
- Use the "Increase Decimal" button in the Home tab to show more precision (e.g., 35.72%).