growth rates
To calculate growth rates, you need to know the initial value and the final value of what you want to measure. Once you have the initial and final values, follow these steps:
1. Calculate the absolute change: Subtract the initial value from the final value. The result will represent the total change that occurred.
Absolute change = Final value - Initial value
2. Calculate the relative change: Divide the absolute change by the initial value. This will give you the proportionate change relative to the initial value.
Relative change = Absolute change / Initial value
3. Calculate the growth rate: To express the relative change as a percentage, multiply the relative change by 100.
Growth rate = Relative change * 100
For example, let's say you want to calculate the growth rate of a company's revenue. The revenue was $500,000 at the start of the year and increased to $600,000 by the end of the year.
1. Absolute change = $600,000 - $500,000 = $100,000
2. Relative change = $100,000 / $500,000 = 0.2
3. Growth rate = 0.2 * 100 = 20%
Therefore, the growth rate of the company's revenue is 20%.