Growth Rate Calculator

Understanding Growth Rate

The Growth Rate measures the percentage change in a value over a specific period. It's a fundamental metric used across various business contexts, such as tracking MRR growth, user acquisition growth, website traffic growth, and more.

How is Growth Rate Calculated?

The formula for percentage growth rate is:

Growth Rate (%) = [(Current Value - Previous Value) / Previous Value] * 100

Where:

• Previous Value: The starting value at the beginning of the period.
• Current Value: The ending value at the end of the period.

For example, if your MRR last month (Previous Value) was $10,000 and your MRR this month (Current Value) is $12,000, the growth rate is: [($12,000 - $10,000) / $10,000] * 100 = ($2,000 / $10,000) * 100 = 0.2 * 100 = 20%.

A negative result indicates a decline or negative growth during the period.

Why is Growth Rate Important?

• Performance Tracking: Shows whether a metric is increasing or decreasing and by how much.
• Goal Setting & Measurement: Allows setting specific growth targets (e.g., "increase MRR by 10% next quarter") and measuring progress.
• Trend Analysis: Calculating growth rates over multiple periods helps identify acceleration, deceleration, or stagnation.
• Benchmarking: Comparing your growth rate to industry benchmarks or competitors provides context.

Considerations

• Ensure you are comparing values over a consistent period (e.g., month-over-month, year-over-year).
• Be mindful of the base value (Previous Value). A high growth rate on a small base might be less significant than a smaller growth rate on a large base.
• The formula results in an error or undefined value if the Previous Value is zero.

Use the calculator above to quickly determine the percentage growth rate between any two values.