1. What Is Revenue Growth?

Revenue growth measures the increase (or decrease) in a company's sales from one period to another, expressed as a percentage. It's a key indicator of business performance and market acceptance.

2. How To Calculate Revenue Growth

The revenue growth formula is:

Where:

• \( \text{Rev}_t \) — Current period revenue
• \( \text{Rev}_{t-1} \) — Previous period revenue

Example: If revenue was $100,000 last quarter and $120,000 this quarter:
Growth Rate = ($120,000 - $100,000) / $100,000 = 0.20 or 20%

3. Importance of Revenue Growth

Details: Revenue growth is crucial for assessing business health, attracting investors, and making strategic decisions. Consistent growth indicates market demand and business scalability.

4. Using the Calculator

Tips: Enter both current and previous period revenues in dollars. Previous revenue must be greater than zero. The calculator will show growth as a percentage.

5. Frequently Asked Questions (FAQ)

Q1: What's considered good revenue growth?
A: Varies by industry, but typically 10-20% annually is strong for mature businesses, while startups may aim for higher rates.

Q2: Can revenue growth be negative?
A: Yes, negative growth indicates declining sales, which may signal problems needing attention.

Q3: How often should revenue growth be measured?
A: Typically quarterly for public companies, but monthly tracking can help identify trends earlier.

Q4: What factors affect revenue growth?
A: Market conditions, competition, pricing, marketing effectiveness, and product demand.

Q5: How does revenue growth differ from profit growth?
A: Revenue measures total sales, while profit accounts for costs. A company can have revenue growth without profit growth if costs rise faster.