 Growth rate is an important indicator thatcharacterizes the increase in profits, output, etc. However, not all know the formulas that allow us to calculate this important indicator. Our article will tell how to determine the rate of growth.

## Growth rate

In order to calculate the growth ratea certain value, it is necessary to know two indicators: the indicator of the current period and the indicator of the previous period of productivity. The formula for determining the rate of growth is as follows:

• ТР = (ПТП-ППП) / ППП х 100%, where ТР - growth rate, ПТП - indicator of the current period, ППП - indicator of the previous period.

For example, in 2012 your enterprise earned 287 million rubles, and for 2013 the profit was 299 million rubles. Calculate the percentage growth rate:

• TP = (299 - 287) / 287 x 100% = 4.18%

It turns out that in 2013 the profit of your company increased by 4.18%.

## The rate of decline in growth

If your productivity or income does not increase, but falls, then in this case consider the percentage reduction in growth.

If it is necessary to calculate the average growth rate for several equal periods of time, use the following formula:

• TPp = ((PTP / IFR)1/n-1) х 100%, where ТРп - growth rate for a certain period, and n - the number of such periods.

For example, if we need to find the average growth rate of your enterprise for each month, the formula will look like this:

• TPn = ((299/287)1/12- 1) x 100% = 0.31%

But determining the rate of growth in one periodThis is not very revealing. Carry out a similar calculation for several different similar periods. Record the data in the table, and better plot the graph. And you can analyze how the rate of growth has changed for different times. For example, 2009, 2010, 2011, 2012 and 2013.

As you can see, in calculating the rate of growth or decrease, there is nothing complicated if you know the appropriate formulas and be able to use them. And for the analysis of profitability or unprofitability, this indicator is indispensable.