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#1
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Calculating market growth rates
I have a lot of quarterly data for market size. I am trying to find out how
I can calculate the average growth rate for this market. For example, if I know - $10m was the initial market size - $100m was the final market size - it took six quarters to grow from $10m to $100m Then what was the growth rate? I am feeling very silly because I used to be able to work this out years ago but I've forgotten the formula and I couldn't find what I wanted in Excel help. |
#2
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Calculating market growth rates
Sean,
how does this market grow? A linear trend would mean that the market grows by more-or-less the same amount of $$ per quarter. If so, then the average growth rate per quarter is computed by (100-10)/6 HTH Kostis Vezerides |
#3
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Calculating market growth rates
Unfortunately, these are not linear markets. (Not at this stage, anyway).
What I am looking for is a way of calculating the Compound Annual Growth Rate. But I can't recall how to calculate this or find anything is Help that refers to CAGR. I know that it isn't a difficult calculation - although not as simple as yours! - but I am exasperated that I can't remember how to do it. But thanks anyway for taking the time to reply. "vezerid" wrote: Sean, how does this market grow? A linear trend would mean that the market grows by more-or-less the same amount of $$ per quarter. If so, then the average growth rate per quarter is computed by (100-10)/6 HTH Kostis Vezerides |
#4
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Calculating market growth rates
OK, we are talking exponential.
100 = 10*(1+r)^6 = r = (100/10)^(1/6) - 1 HTH Kostis Vezerides |
#5
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Calculating market growth rates
"Sean Haffey" wrote:
- $10m was the initial market size - $100m was the final market size - it took six quarters to grow from $10m to $100m Then what was the growth rate? =RATE(6,, -10, 100) That is the average __quarterly__ rate. If you want the effective __annual__ rate, ostensibly, it might be: =FV(RATE(6,, -10, 100), 4,, -1) - 1 which is the same as (1 + r)^4 - 1, where "r" is the quarterly rate, however you want to compute it. |
#6
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Calculating market growth rates
Embellishment ....
I wrote: =RATE(6,, -10, 100) That is the average __quarterly__ rate. I should have noted that that is the same as (100/10)^(1/6) - 1. If you want the effective __annual__ rate, ostensibly, it might be: =FV(RATE(6,, -10, 100), 4,, -1) - 1 I should have written "it __is__", not "ostensibly it might be". I was thinking of how financial engineers annualize the std dev, not the average. Also, I might have noted that the above FV() function can be simplified to: =RATE(6/4,, -10, 100) which is the same as (1 + r)^4 - 1, where "r" is the quarterly rate, however you want to compute it. ..... Which, in your case, can be simplified to: (100/10)^(4/6) - 1 |
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