Revenue Growth Calculation Formula

Divide the total revenue growth by the revenue from the previous year.

Revenue growth calculation formula. For service based companies the formula is revenue number of customers x average price of services. 3500 1000 1000 x 100 250. For a product based business the formula is revenue number of units sold x average price. How to calculate total revenue growth to calculate total revenue growth subtract the most current period s revenue by the revenue number from the same period in the prior year.

For very early stage startups tracking weekly revenue growth will be more helpful to gauge progress. Sales growth was 1 5 1 0 5 or 50. The revenue growth formula. This represents the revenue growth from year 1 to year 2 which then must be calculated as a percentage.

For growth formula y b m x it represents an exponential curve in which the value of y depends upon the value of x m is base with x as its exponent and b are constant. It is also an optional argument. To calculate revenue growth as a percentage you subtract the previous period s revenue from the current period s revenue and then divide that number by the previous period s revenue. In our case that would be 45 million 30 million or 1 50 if this was a simple one year calculation we d be done at this point.

So if you earned 1 million in revenue last year and 2 million this year then your growth is 100 percent. Now let s take a look at the revenue formula itself in both forms. Then multiply 0 2 by 100 to get 20 percent. Calculate the revenue growth rate by subtracting the first month revenue from the second month revenue.

Divide the result by the first month revenue and then multiply by 100 to turn it into a percentage. Last year we sold 1 000 game consoles for. Some of the common usages of growth rate include revenue growth dividend growth profit growth etc. In this example divide 2 million by 10 million to get 0 2.

This means the company grew its total revenue by 20 percent from one year to the next. The answer is 130 000 100 000 30 000. Subtract year 1 revenue from year x revenue which in this case is year 2 revenue. A sample sales revenue calculation.

Then multiply the result by 100 to calculate the total revenue growth as a percentage. For example if you have 1000 in revenue the first month and 3500 the second month your growth rate would be 250.