Calculating Growth Rates with Negative and Positive Numbers

When dealing with negative and positive numbers, calculating growth rates can be a bit tricky. However, there is a way to modify the formula to ensure that the growth percentage is calculated properly.

Instead of using the simple formula , you can use the following formula to calculate growth rates with negative and positive numbers:

The ABS function will ensure that the denominator (Period 1) is always a positive number, which will allow the growth percentage to be calculated properly regardless of whether the numbers are negative or positive.

Here's an example to illustrate how this formula works:

1. Let's say that in Period 1, your net income was -$10,000 and in Period 2, your net income was $5,000.
2. Using the simple formula, the growth rate would be calculated as follows:
   
   
   Code:

   ($5,000 - (-$10,000)) / (-$10,000) = 1.5 or 150%

   This growth rate doesn't accurately reflect the fact that your net income has gone from negative to positive.
3. Using the modified formula, the growth rate would be calculated as follows:
   
   
   Code:

   (($5,000 - (-$10,000)) / ABS(-$10,000)) * 100 = 150%

   This growth rate accurately reflects the fact that your net income has increased by 150%.