Revenue Growth Rate is a metric that determines the percentage increase or decrease in a company’s revenue during a specific period. This measure, unlike the Gross Profit Margin, specifically focuses on the growth aspect of the company’s revenue, giving us an idea of how fast the company’s revenue is growing over time.
How to Measure Revenue Growth Rate?
To measure the Revenue Growth Rate, you need to follow a simple, straightforward formula. Here’s how it’s done:
- First, subtract the revenue of the previous period from the revenue of the current period.
- Then, divide the obtained difference by the revenue of the previous period.
- Lastly, multiply the final result by 100 to get the Revenue Growth Rate in percentage.
The time frame for the ‘current’ and ‘previous’ period can vary. It can be yearly, quarterly, or even monthly, depending on your company’s reporting practices and needs.
Revenue Growth Rate Calculator
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