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How to calculate a growth rate in Excel and Google Sheets
Excel & Google Sheets
=(B3-B2)/B2✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Year | Revenue |
| 2022 | 80000 |
| 2023 | 92000 |
| 2024 | 107000 |
=(B3-B2)/B2→0.15
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Step by step
- 1Put the starting value in one cell (e.g. B2) and the ending value in another (e.g. B3).
- 2In a result cell, type =(B3-B2)/B2 for the simple period growth rate.
- 3Press Enter and format the result as a percentage.
- 4For CAGR over multiple years, use =(B3/B2)^(1/years)-1, replacing 'years' with the number of periods.
Tips
- Simple growth rate works for a single period. CAGR is better when comparing growth over multiple years as it smooths out volatility.
- If the starting value could be negative or zero, growth rate is mathematically undefined. Use IFERROR to catch those cases.
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Frequently asked
What is CAGR and when should I use it?
CAGR (Compound Annual Growth Rate) is the steady rate at which an investment would have grown if it grew at the same rate every year. Use it to compare multi-year growth across different periods or assets.
How do I calculate CAGR over 5 years?
=(End/Start)^(1/5)-1. For example, =(B6/B2)^(1/5)-1 if your data spans rows 2 to 6.