How to calculate growth rate

In finance, growth rate is a measure of the increase in a financial metric over a specific period of time. It is commonly used to evaluate the growth potential of a company, investment, or industry. The growth rate can be calculated for various financial metrics such as sales, earnings, dividends, or the value of an investment. To calculate the growth rate, you can use the following formula: Growth Rate = ((Current Value - Previous Value) / Previous Value) * 100 Where: - Current Value: The most recent value of the financial metric - Previous Value: The value of the financial metric at the beginning of the period Once you have the current and previous values, you can plug them into the formula to calculate the growth rate. The result will be expressed as a percentage, indicating the rate of increase or decrease in the financial metric over the period. For example, if a company's sales were $500,000 last year and $600,000 this year, the growth rate would be: ((600,000 - 500,000) / 500,000) * 100 = 20% This means that the company's sales have grown by 20% over the period. It's important to note that the growth rate is a useful tool for analyzing the performance and potential of a company or investment. However, it should be used in conjunction with other financial metrics and qualitative analysis to form a comprehensive evaluation. Additionally, it's important to consider the context and factors influencing the growth rate, such as industry trends, economic conditions, and management decisions.