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How to calculate an annual run rate in Excel and Google Sheets
Excel & Google Sheets
=B2/A2*12✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Months Elapsed | Actual Revenue |
| 5 | 415000 |
=B2/A2*12→996000
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Step by step
- 1In A2 enter the number of elapsed months (e.g. 5 for data through May). In B2 enter the actual revenue or metric for those months (e.g. 415000).
- 2In C2 enter =B2/A2*12. This divides actual by elapsed months to get a monthly rate, then multiplies by 12 for an annualized figure.
- 3For a daily-based run rate — useful for metrics that accrue unevenly — replace A2 with the actual elapsed calendar days and multiply by 365 instead of 12.
- 4To show the gap remaining to a full-year target, add =D2-B2 where D2 contains the annual target. This tells you how much more must be sold in the remaining months.
- 5For a more precise elapsed-day count, use =TODAY()-DATE(YEAR(TODAY()),1,1)+1 as the denominator instead of a manual month count.
Tips
- Run rate assumes a constant pace — it overstates full-year results for businesses with Q4 seasonality and understates for Q1-heavy businesses. Always state the assumption.
- If recent months include one-time items (a large deal or a refund), remove them before calculating run rate to get a cleaner baseline.
- Cross-check against prior-year seasonality: multiply run rate by the historical H1-to-full-year ratio for a seasonality-adjusted estimate.
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Frequently asked
Should I use a monthly or daily run rate?
Use monthly for revenue or bookings tracked by calendar month. Use daily for metrics like orders, page views, or usage that can accrue on any day and are sensitive to month-length variation.
How do I calculate a run rate when I have trailing twelve months of data?
Trailing twelve months is already annualized — it is your run rate. Sum the last 12 months of actuals directly.