How to use the revenue growth calculator
The page has two tools.
- Period growth compares two numbers. Enter the earlier and later revenue, then choose whether they are a month, a quarter or a year apart. For a year-over-year comparison of a single month (this March against last March), choose Years.
- Series takes a whole run of revenue figures. Paste them oldest first, one per period, and choose whether each covers a month, a quarter or a year. With 13 or more months (or 5 or more quarters), the table adds a year-over-year column; with two full years it also shows trailing 12-month growth.
Use revenue recognized in each period from your income statement or accounting system, not cash received, unless cash is what you want to track.
The formulas
Compound growth rate = (Revenuelast ÷ Revenuefirst)1 ÷ n − 1
Annualized equivalent = (1 + g)p − 1n is the number of periods between the first and last value (one less than the number of values), g the growth rate per period and p the number of periods in a year: 12 for months, 4 for quarters. For monthly data the compound rate is the CMGR, for quarterly data the CQGR.
A worked example
Two months. Revenue rose from $120,000 to $126,000, a gain of $6,000. That is 5.00% growth month over month. If that pace held for a year, revenue would grow 79.59%, ending near $226,278 a month.
Twelve months. Company A’s example series runs from $48,200 to $70,400. Revenue grew in 8 of 11 months and the total gain was 46.06%. The CMGR is 3.50%, which annualizes to 51.18%.
Annualizing monthly growth properly
The most common mistake is to multiply a monthly rate by 12. Each month’s growth builds on a larger base, so the true annual figure is higher:
| Monthly growth | Multiplied by 12 | Compounded for 12 months |
|---|---|---|
| 1.00% | 12.00% | 12.68% |
| 3.00% | 36.00% | 42.58% |
| 5.00% | 60.00% | 79.59% |
| 10.00% | 120.00% | 213.84% |
The gap is small at low rates and enormous at high ones. Treat any annualized figure built from a single month with caution: one strong month, a large one-off order or a price change can produce a number the business will never reach over a full year. Annualizing the CMGR from a longer series is far more reliable.
Compound rate versus average growth
The Series tool shows both the compound rate and the simple average of the period changes. The average is never below the compound rate, and the gap widens as growth gets choppier. Suppose revenue falls 20% one month and rises 20% the next: the average change is 0.00%, yet revenue ends lower, and the CMGR is -2.02%. The compound rate tells you what actually happened between the first and last value.
Year-over-year and trailing 12 months
Seasonal businesses need comparisons that span a full year. Add a 13th month to the example and the latest year-over-year growth appears: +49.59%. With quarterly data, the example of eight quarters gives year-over-year growth of +21.82% for the latest quarter and trailing 12-month growth of +20.97%. Trailing 12-month growth compares the sum of the last four quarters with the four before, which smooths out a single unusual quarter.
What this calculator does not include
- Organic versus acquired growth. Revenue from an acquisition inflates growth; strip it out to see how the existing business is doing.
- Inflation and price changes. Growth here is nominal. Part of it may come from higher prices rather than more customers or units.
- Calendar effects. Months have different numbers of days and trading days, which can move MoM growth by a few percent on their own.
- Profitability. Revenue growth says nothing about margins or cash. Pair it with the profit margin calculator and the burn rate and runway calculator for a fuller view.