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How do you calculate growth percentage year over year?

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We'll use 1969 and 1970 as years 1 and 2 respectively. Also, say we're looking at Revenue growth or loss.

Example 1 Year 1 Revenue 1000 Year 2 Revenue 250

Step 1. 250 - 1000 = -750 Step 2. -750/1000 = - .75 Step 3. Convert to % = - 75% (Negative = LOSS %)

Example 2 Year 1 Revenue 150 Year 2 Revenue 500

Step 1. 500 - 150 = 350 Step 2. 350/150 = 2.33 Step 3. Convert to % = 233% (Positive = GROWTH %)

In Excel, let's say you have last year's sales numbers in cell A1 and this year's numbers in cell A2. In cell A3, you want to calculate the year over year percentage change.

The formula in cell A3 would look like this (Current - Previous)/Previous or =SUM(A2-A1)/A1. Instead of multiplying by 100 to get the percent, use the "Format cell" option to choose percentage. The number will automatically change to a percentage.

The problem with said calculation is when the first year or both years ended in negative values, say the company ran at a loss.

Example 3 Year 1 Revenue -500 Year 2 Revenue -200

You will end up with a negative % growth.

To counter this use the following formula in A3 =IF(A2>A1;ABS(A2/A1-1);-(A2/A1-1)). This formula will determine whether or not your second year is a larger or smaller amount and the calculate the correct percentage based on that information. In our examples case although the company is still running at a loss it showed a positive growth of 60%.

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