Many investors seek companies that can improve their sales at above-average rates, which is why it's useful to know how to calculate revenue growth from one year to the next.

Determining the growth rate over a one-year period is straightforward; you simply take the sales difference, divide it by the starting revenue total, and multiply the result by 100. The math is slightly more complicated for a three-year period, but below we'll outline the entire calculation.

Our example company had the following revenue performance:

Time	Revenue
End of Year 0	$30 million
End of Year 1	$33 million
End of Year 2	$41 million
End of Year 3	$45 million

At the beginning of our three-year period, that is at the end of year zero, the sales base sat at $30 million. It grew to $33 million by the end of year 1, to $41 million by the end of year 2, and to $45 million by the end of year 3. So in three years the revenue grew by 50%, or $15 million. But how much did it grow per year ?

Answer rating: 100% (QA)

Solution It grows per year as follows From 0 year to 1 year end ... View the full answer