2+ Ways to Calculate Monthly Growth Rate in Excel

If you are involved in a profession where you need to monitor the monthly progress of the company, you may need to know how to calculate the monthly growth rate. But many of you don’t know that you can easily calculate the monthly growth rate in Excel. To do that, this article will describe more than 2 ways to calculate the monthly growth rate in Excel.

Monthly Growth Rate Formula

The Monthly Growth Rate is the estimation of the growth of a company. The equation for calculating the monthly growth rate:

Formula of Calculating Monthly Growth Rate in Excel

Usually, the monthly growth rate is expressed in percentages.

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Introduction to the Dataset

Here is a dataset to show you how to calculate the monthly growth rate. The dataset has 3 columns: Month (column A), Revenue (column B), and Monthly Growth Rate (column C).

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Quickest Way to Calculate Monthly Growth Rate in Excel

The quickest way to calculate the monthly growth rate is to follow the fundamental equation of monthly growth rate.

Usage Guide

Step_1: Leave the top cell (cell C2) of the Monthly Growth Rate column (column C).

Step_2: Write the formula in the second top cell (cell C3).

Formula

=(B3-B2)/B2

Quickest Way to Calculate Monthly Growth Rate in Excel

I have left the top cell blank because the formula requires a difference of values between the ending value and starting value. But there is no value before the revenue of January.

Step_3: Press ENTER to apply the formula.

Step_4: Select cell C3.

Step_5: Now click on the Home tab.

Quickest Way to Calculate Monthly Growth Rate in Excel

Step_6: From the Number group, select the percentage (%) icon.  

Step_7: Double-click the Fill Handle at cell C3 to copy the formula down.

Quickest Way to Calculate Monthly Growth Rate in Excel

Final Result 

The monthly growth rate is represented in percentages now. But you can keep the results if you prefer.

Quickest Way to Calculate Monthly Growth Rate in Excel

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Alternative Way to Calculate Monthly Growth Rate

The other method to calculate the monthly growth rate is using another structure of the fundamental growth equation.

Usage Guide

Step_1: Type the formula in the second top cell (cell C3).

Formula

=(B3/B2)-1

Alternative Way to Calculate Monthly Growth Rate in Excel

Step_2: Press ENTER.

Step_3: Select the value in cell C3.

Step_4: Now click on the Home tab.

Step_5: Select the percentage (%) icon from the Number group.  

Step_6: Double-click on the Fill Handle at cell C3.

Final Result

This formula works fine like the first method. You can memorize any of the two methods to calculate the monthly growth rate.

Alternative Way to Calculate Monthly Growth Rate in Excel

But you may find negative monthly growth rates like my dataset. These negative values are important to mark sometimes. You can identify the negative values easily with a few more steps.

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Highlight the Negative Values

Step_7: Select the values of column C.

Step_8: Select the Home tab.

Step_9: From the Styles group, click on the Conditional Formatting drop-down menu. 

Step_10: Select the Less Than command.

The Less Than window will come along on the screen.

Step_11: Insert ‘0’ in the Format cells that are LESS THAN box.

Step_12: Pick a color from the second box.   

Step_13: Hit the OK button.

You will see the negative results are marked with red color boxes.

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Calculate Compound Monthly Growth Rate in Excel

The compound monthly growth rate finds the growth rate of a business in a given period of time.

The formula for compound monthly growth rate:

={(Last Value/First Value)^(1/1-Time)}-1

Usage Guide

Step_1: Select an empty cell (cell C7).

Step_2: Type the formula of the compound growth rate.

Formula

=((B13/B2)^1/11)-1

Formula Explanation

  • B13 is the ending value.
  • B2 is the beginning value.
  • 11 is the difference in time (12-1=11).

Calculate Compound Monthly Growth Rate in Excel

Step_3: Hit the ENTER key.

Calculate Compound Monthly Growth Rate in Excel

Step_4: Convert the decimal value into the percentage (%).  

Final Result

The result is -5%. It’s normal to return negative values because the growth can not be always positive.

Calculate Compound Monthly Growth Rate in Excel

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Conclusion

I hope the 3 approaches of monthly growth rate-related formulas will help you to solve any problem regarding this topic. Feel free to drop a comment in the comment section if you find anything confusing.

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