Simple Growth Rate Calculator
Calculate percentage growth, absolute change, and average rate over time.
What is Simple Growth Rate?
The Simple Growth Rate (SGR) is a fundamental metric used to determine the percentage change of a specific variable over a given period. Unlike complex financial instruments, the simple growth rate provides a straightforward snapshot of performance, indicating how much a value has increased (or decreased) relative to its starting point.
This metric is universally applicable, used in fields ranging from corporate finance (calculating revenue growth) and economics (GDP growth) to biology (population growth) and personal analytics (social media follower increase).
How to Calculate Growth Rate
The formula for calculating the simple growth rate percentage is straightforward:
For example, if a small business had revenue of 50,000 in Year 1 (Start Value) and 65,000 in Year 2 (End Value):
- Difference: 65,000 – 50,000 = 15,000
- Division: 15,000 / 50,000 = 0.30
- Percentage: 0.30 × 100 = 30% Growth
Understanding Average Annual Growth Rate (AAGR/CAGR)
If you are measuring growth over multiple time periods (e.g., 5 years), the simple percentage change might be misleading if you want to know the steady annual rate. In this case, we calculate the Compound Annual Growth Rate (CAGR) using the "Number of Periods" input field above.
Where n represents the number of periods.
Why is Growth Rate Important?
- Performance Tracking: It is the primary indicator of success for businesses and investments.
- Trend Analysis: Helps identify whether a metric is accelerating, decelerating, or plateauing.
- Forecasting: Historical growth rates are often used to project future performance.
- Benchmarking: Allows for comparison against competitors or industry standards.
Interpreting the Results
Positive Growth: Indicates an increase in value. For revenue or savings, this is generally good. for expenses or debt, this is generally bad.
Negative Growth: Indicates a contraction or loss. Often visualized in red, this means the ending value is lower than the starting value.
Flat Growth (0%): No change occurred between the two periods.