How To Calculate Revenue Growth For 3 Years

For example if 2016 revenue was 3 million and 2019 revenue is 15 million.

How to calculate revenue growth for 3 years. Percent growth rate percent change number of years. Many investors seek companies that can improve their sales at above average rates which is why it s useful to know how to calculate revenue growth. We now have estimated sales for the year 2019 1 499 186 53 year 2020 2 035 556 33 and year 2021 2 763 825 23. We have year wise revenue data of a company and we want to forecast the revenue for the current year.

Then multiply 0 2 by 100 to get 20 percent. To make things more clear let s take another example. Percent change 100 present or future value past or present value past or present value. Calculate the percent change from one period to another using the following formula.

In the example 1 091 raised to the power of three gives you a three year growth rate of 1 299. Then multiply the result by 100 to calculate the total revenue growth as a percentage. Historical revenue data can help guide your long term plans for growth. This represents the revenue growth from year 1 to year 2 which then must be calculated as a percentage.

This means the company grew its total revenue by 20 percent from one year to the next. For example if you want to measure the annual revenue growth of a company between 2011 and 2015 then the number of years is 2015 2011 or 4. 12 000 000 3 000 000 4. 4 x 100 400.

Since you re measuring the growth rate for a series of years you ll need to know the number of years during the period. Analyze trends historical revenue data also means you can set up sales dashboards to identify customer behavioral patterns and adjust operations around it. In this example divide 2 million by 10 million to get 0 2. Next using the exponent function on your calculator or in excel raise that figure 1 50 to the power of 1 3 the denominator represents the number of years 3 which in this case yields 1 145.

15 million 3 million 12 million. Recent yearly revenue base year revenue base year revenue x 100 total growth percentage. Calculate the percent growth rate using the following formula. For example if the company earned 300 000 in revenue this year and earned 275 000 last year then the growth rate is 1 091.

The answer is 130 000 100 000 30 000. Divide the total revenue growth by the revenue from the previous year. Cube this number to calculate the growth rate three years from now. The equation for growth percentage is.

Subtract year 1 revenue from year x revenue which in this case is year 2 revenue.