Revenue Growth Calculator
This Revenue Growth Calculator helps you quantify absolute and percentage changes between two revenue figures, compute compound annual growth rate (CAGR) across multiple periods, run forward projections using an assumed annual growth rate, and estimate the time required to reach a revenue target.
Use consistent currency units for inputs. For multi-period comparisons, CAGR is the preferred measure to annualize growth and compare performances across differing time spans. Projections assume constant annual growth and do not account for seasonality, inflation, or one-off events.
Inputs
Results
Absolute change in revenue
$20,000.00
Period percent change
2000.00%
Compound Annual Growth Rate (CAGR)
2000.00%
Projected revenue after projection years
$159,720.00
Estimated years to reach target revenue
5.3596
| Output | Value | Unit |
|---|---|---|
| Absolute change in revenue | $20,000.00 | currency |
| Period percent change | 2000.00% | percent |
| Compound Annual Growth Rate (CAGR) | 2000.00% | percent |
| Projected revenue after projection years | $159,720.00 | currency |
| Estimated years to reach target revenue | 5.3596 | years |
Visualization
Methodology
Absolute change is calculated as the difference between ending and starting revenue: ending − starting.
Period percent change is the absolute change divided by starting revenue, expressed as a percentage: ((ending − starting) / starting) × 100. This is the standard year-over-year (or period-over-period) change.
CAGR annualizes growth over multiple periods using the formula: (ending / starting)^(1 / periods) − 1, converted to percent. CAGR removes the effects of compounding to provide an average annual growth rate.
Projected revenue uses exponential growth: ending × (1 + growth_rate)^(projection_years). Time-to-target uses logarithms to solve for years in the compound growth equation: log(target / ending) / log(1 + growth_rate).
These formulas and numeric methods are consistent with standard business analytics guidance used in government and academic sources for financial metrics and projections.
Expert Q&A
What should I do if starting revenue is zero?
If starting revenue is zero, percent-change and CAGR formulas will divide by zero and are undefined. Use absolute change instead and document the context (e.g., a new product or business). When comparing across firms or periods, consider alternative metrics such as revenue per customer or customer growth.
When should I use CAGR instead of simple percent change?
Use CAGR to compare growth across different time spans or to annualize multi-year growth. For single-period changes (one year vs prior year) use period percent change. CAGR smooths volatility and assumes compounding at a constant rate.
Do projections account for inflation, seasonality, or one-time events?
No. Projections here assume a constant annual growth rate. Adjust projected_growth_rate to reflect expected inflation, seasonality, or known one-off effects, or run scenario analyses with different growth rates.
What if projected growth rate is zero or negative?
A zero growth rate yields a flat projection equal to the latest revenue. Negative growth rates model decline; time-to-target calculations require a growth rate that moves revenue toward the target. If (1 + projected_growth_rate) ≤ 0, logarithmic calculations are invalid; choose a valid growth rate or use alternative scenario modeling.
How precise are the results and how should I round them?
Results are mathematical outputs of the inputs and should be rounded to a precision appropriate for decision-making (typically whole currency units for high-level forecasts, one decimal for percent points). Keep raw inputs documented to allow recomputation with different rounding.
Can I compare revenues reported in different currencies or accounting bases?
No—always convert revenues to the same currency and ensure consistent accounting treatments (e.g., GAAP vs IFRS) before calculating growth. For cross-border comparisons, use consistent FX conversions for the period and disclose the basis.
Sources & citations
- U.S. Small Business Administration — Financial management guides — https://www.sba.gov
- National Institute of Standards and Technology (NIST) — Measurement science and best practices — https://www.nist.gov
- Financial Accounting Standards Board (FASB) — Accounting standards — https://www.fasb.org
- MIT Sloan School of Management — Research and practitioner materials on growth metrics — https://mitsloan.mit.edu
- U.S. Census Bureau — Business dynamics and revenue statistics — https://www.census.gov