Growth rate
In one sentenceThe percentage change in a financial figure such as sales or profit between two periods, calculated by dividing the difference by the previous period's value.
Simply put
The growth rate turns an increase in SAR into a percentage that is easy to judge: an increase of 200,000 SAR is large for a small store and small for a large company.
When comparing over several years, use the compound annual growth rate rather than the average of percentages, because each year's growth builds on the figure of the year before. And compare sales growth with the growth of expenses and receivables.
Worked example
An electronics store sold 800,000 SAR last year and 1,000,000 SAR this year.
Difference = 1,000,000 − 800,000200,000 SAR
Previous year value800,000 SAR
Growth rate = 200,000 ÷ 800,00025%
Formula: (Current period value − previous period value) ÷ previous period value
Don't confuse it with
Trend analysisThe growth rate is a percentage between two periods, while trend analysis follows many years relative to a base year.
in FullScreen ERP
The analytics dashboard (cloud) shows indicators and charts of sales activity. Reports and AI