Calculated from the sample figures using the displayed formula.
What is the growth rate formula?
(New value − Old value) ÷ Old valueGrowth rate measures the change from an earlier value relative to that earlier value.
What do the inputs mean?
- Old value
- The value entered for old value. Keep its period and units consistent with the other inputs.
- New value
- The value entered for new value. Keep its period and units consistent with the other inputs.
How to calculate it step by step
- Define the decision.
Write down what the result will help you compare or decide. - Collect matching inputs.
Use figures from the same period and apply the definitions shown on this page. - Apply the formula.
(New value − Old value) ÷ Old value. - Check the units.
Confirm whether the result is a currency amount, percentage, number of periods or ratio. - Test a second case.
Change one assumption at a time to see what drives the result.
Worked example
Using the sample figures in the calculator, the result is 16%. Change one figure at a time and recalculate to see which assumption has the greatest effect. A spreadsheet should return the same result when it uses the same formula, units and timing.
When should you use growth rate formula?
Use it for one-period revenue, customer, output or balance growth.
Limitations and common mistakes
A near-zero or negative base needs careful interpretation.
Do not mix annual figures with monthly figures, ending balances with averages, or percentages with whole numbers. Record the definition used so another person can reproduce the result.
Frequently asked questions
What is growth rate formula?
Growth rate measures the change from an earlier value relative to that earlier value.
How should I use growth rate formula?
Use the formula only after matching every input to the same period, unit and definition. Then compare the result with a worked example and the decision you are trying to make.
What is the most common mistake with growth rate formula?
A near-zero or negative base needs careful interpretation.
Can I calculate growth rate formula in a spreadsheet?
Yes. Reproduce the displayed equation with separate cells for each input, keep percentages as decimals, and test the spreadsheet against the worked example before replacing the sample figures.
Sources and methodology
This page uses the Beginners’ Guide to Financial Statements for the underlying financial or reporting context. Spreadsheet-related behavior is checked against Microsoft’s financial-function documentation. Examples are illustrative and use the formula displayed on the page.