On Aug 9, 5:10 pm, Buck wrote:
I've got a list of data representing monthly revenue. Overall, I can
see the trend is moving up.

Not really.

I looked at the GROWTH function

The GROWTH function is for exponential change. That is clearly not
the situation that you have.

When I plot the data on a column chart and use a Linear Regression
Trendline I get a positive number R2 = 0.0404 (I'm sure tha's good
but I can't explain why).

Because that is not what an R^2 of 0.0404 tells you. The closer R^2
is to 1, the better the regression curve fits the actual data.
Conversely, an R^2 so close to zero says the regression curve does not
fit the actual data very well. Ergo, the upward slope of the linear
trendline is suspect.

(That is an over-simplified explanation of R^2. Although I believe it
is applicable in this instance, see http://en.wikipedia.org/wiki/Coeffic..._determination
for a more complete explanation.)

Can I use r-squared to calculate an annual growth?

No. R^2 tells you nothing about the growth rate of the data. It is
only a measure of fit between the regression curve and the data.
Ostensibly, the regression line should tell you something about the
growth of the data. But only if it fits the data well. In this case,
it does not; so the behavior of the regression line is inconclusive,
IMHO.

The values are 6560, 5970, 6290, 6640, 5950, 5900, 5880, 5850, 7370,
6300, 6700, 6310.

When I plot these data points, I see no clear trend of the monthly
amounts. Arguably, there might be some seasonal pattern. But only
you could recognize that, based on your knowlege of the business.

Or should I skip that and use some other means of calculating growth?

Yes. I would plot the cumulative revenue. Then we see a clearly
linear growth rate (R^2 = 0.999). The linear trendline suggests a
constant growth of about 6334 per month. But a simple average
indicates a constant growth of about 6385 per month. Indeed, using
the RSQ function, we find that the cumulative revenue based on the
average fits the actual cumulative revenue just as well as the linear
trendline.

Alternatively, you might look at the sum of or average monthly revenue
for each 1/3 of the year. The data suggests a pattern; but I am
relunctant to draw any conclusion about patterns based on a single
year. The middle third is about 7% lower and the last third is about
8% higher than the first third. Whether that suggests a seasonal
variation and whether that suggests an upward trend in the last third
is anyone's guess. There is too little data to draw any such
conclusions, IMHO. If you compare with similar data from at least 2
prior years, maybe you could draw a credible conclusion.