Revenue Growth Rate Calculator
Your Revenue Growth Rate:
What is Revenue Growth Rate?
Revenue Growth Rate (RGR) is a key financial metric used to measure the increase in a company's revenue over a specific period. It indicates how quickly a business is expanding its sales. A positive revenue growth rate signifies that the company is generating more sales, which is generally a sign of healthy business performance and market demand. A negative growth rate, on the other hand, suggests a decline in sales, which might require further investigation into its causes.
The formula to calculate Revenue Growth Rate is as follows:
Revenue Growth Rate = ((Current Period Revenue – Previous Period Revenue) / Previous Period Revenue) * 100
This calculation allows businesses to compare their performance over different periods (e.g., quarter-over-quarter, year-over-year) and to benchmark against competitors. A consistent and healthy RGR is often a strong indicator of a company's market position, effective strategies, and overall viability.
Example:
Let's say a company had a revenue of $1,000,000 in the current quarter and $900,000 in the previous quarter.
- Current Period Revenue: $1,000,000
- Previous Period Revenue: $900,000
Using the formula:
RGR = (($1,000,000 – $900,000) / $900,000) * 100
RGR = ($100,000 / $900,000) * 100
RGR = 0.1111 * 100
RGR = 11.11%
This means the company experienced an 11.11% increase in revenue from the previous quarter to the current quarter.