Sales Growth Rate Calculator: Period Growth, CAGR and Annualized Rate
Work out sales growth between two periods (YoY, QoQ or MoM) with the dollar change and multiple, the compound growth rate per period (CAGR) and the annualized rate, or paste a list of period sales to get the growth of each period, the average and the CAGR, plus a projection and the growth needed to hit a sales goal.
How it works
Sales growth rate (%) = (current − previous) ÷ previous × 100 · Growth multiple = current ÷ previous · CAGR per period = (current ÷ previous)^(1 ÷ number of periods) − 1 · Annualized rate = (1 + rate per period)^(periods per year) − 1 · Growth needed = (goal ÷ latest sales)^(1 ÷ periods) − 1
Sales growth rate expresses the change between two periods as a percentage of the earlier one, so a $20,000 rise reads very differently on an $80,000 base than on an $800,000 base. Comparing the same period a year earlier (year over year) removes seasonality; quarter-over-quarter and month-over-month comparisons show recent momentum but swing with the season. When the two figures are several periods apart, the total growth overstates the yearly pace. The compound annual growth rate (CAGR) gives the steady rate per period that would turn the first figure into the last, so 100,000 growing to 150,000 over 3 years is 14.47% a year, not 50% ÷ 3 = 16.7%. With a list of period sales, the calculator also shows each period’s growth and their simple average; the average can differ from the CAGR when sales rise and fall, and the CAGR is the better summary. The annualized rate compounds a quarterly, monthly or weekly rate to a full year: 5% a quarter is 21.55% a year. The projection repeats the compound rate for five more periods, and the goal option inverts the CAGR to show the growth you would need. Figures are nominal, so in a year of 3% inflation, 3 points of growth come from prices alone.
Worked example
Sales rise from $80,000 last year to $100,000 this year. The change is $100,000 − $80,000 = $20,000, so the growth rate is 20,000 ÷ 80,000 × 100 = 25.00% and the growth multiple is 1.25×. If growth continues at 25% a year, next year’s sales would be $125,000. In list mode, the default figures 100,000, 90,000, 125,000 and 150,000 show yearly changes of −10.00%, +38.89% and +20.00%, a total growth of 50.00% and a CAGR of (150,000 ÷ 100,000)^(1/3) − 1 = 14.47% a year.
Sources: Fit Small Business: How to calculate a company’s growth rate (growth, YoY, QoQ and CAGR examples) · Qwilr: Sales growth rate calculator · Visual Paradigm: Sales growth rate (CAGR) calculator
Frequently asked questions
How do you calculate sales growth rate?
Subtract the previous period’s sales from the current period’s, divide by the previous period’s sales and multiply by 100. From $80,000 to $100,000: (100,000 − 80,000) ÷ 80,000 × 100 = 25%.
Should I compare to the previous month or the same month last year?
Year-over-year comparison (this March vs last March) removes seasonality and is best for businesses with predictable cycles. Month-over-month shows near-term momentum but can mislead when demand swings by season, such as a December peak followed by a January dip.
What is the difference between growth rate and CAGR?
The growth rate is the total change between two points. CAGR spreads that change into a steady compound rate per period. Sales that grow from $100,000 to $150,000 in three years have grown 50% in total, which is a CAGR of 14.47% a year.
How do I annualize a quarterly or monthly growth rate?
Compound it: (1 + rate)^(periods per year) − 1. A 5% quarterly rate is 1.05⁴ − 1 = 21.55% a year, and 2% a month is 1.02¹² − 1 = 26.82% a year. Only do this if the rate is likely to repeat; one strong month rarely does.
What is a good sales growth rate?
It depends on the size and stage of the business. Mature companies often grow sales in line with inflation plus a few points, while young companies can grow 20–100% a year from a small base. Compare against your market’s growth and against your own history, and remember that growth below inflation is a fall in real terms.
What does a negative growth rate mean?
Current sales are below the previous period. A −10% rate means sales are 10% lower than before. Recovering takes a larger percentage rise, because it starts from a smaller base: after a 20% fall you need 25% growth to get back to the old level.
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Educational estimate, not financial or tax advice.