Often for analysis of a number of speakers used statistics such as growth rate as a percentage and the corresponding growth rate.This is usually the first all clear, but the second often leads to various questions relating to both the interpretation of the obtained values and the calculation of the formula.It's time to figure out what is the difference between these quantities and how they need to properly define.
growth rate
This index is calculated in order to find out what percentage of the value of one number from the other.The role of the latter is most often used the previous value, or base, that is, one that is at the beginning of the test series.If the result is greater than 100%, it means that an increase in the test indicator, and vice versa.Calculate the rate of growth is very simple: it is enough to find the ratio of the reporting period to the previous value or the base length of time.
growth rate
Unlike the previous figure allows us to determine not how much, but how much change of variable.A positive value calculation results means that there is the growth rate, and the negative - the rate of decline of the studied values compared with the previous or base period.How to calculate the growth rate?First, find the ratio of the test indicator to the base or previous, and then the result subtracted from unity, then usually the result is multiplied by 100 to get a percentage.This method is used most often, but it happens that instead of the actual values of the analyzed indicators we only know the value of absolute growth.How to calculate the growth rate in this case?Here it is necessary to use an alternative formula.The second option is to find a calculation of the percentage of the absolute increase in the level, in comparison with which it was designed.
Practice
Suppose we know that in 2010 the Joint Stock Company "Shining Path," a profit of 120 000 rubles., In 2011 - 110 400 rubles., And in 2012 the value of revenue increased comparedto the year 2011 by 25 000 rubles.Let's see how to calculate the growth rate and the growth rate on the basis of available data, and how this can be concluded.
1. Calculation of indicators for 2011.
growth rate = 110 400/120 000 = 0.92 or 92%.
Conclusion: In 2011, the enterprise income compared with the previous year was 92%.
growth rate = 110 400/120 000 - 1 = -0.08, or 8%.
This means that in 2011 the income of "Shining Path" in comparison with 2010 decreased by 8%.
2. Calculation of indicators for the year 2012.
growth rate = (120 000 + 25 000) / 120 000 ≈ 1,2083 or 120.83%.
This means that the profit of our company in 2012 compared with the previous year 2011 amounted to 120.83%.
growth rate = 25 000/120 000 - 1 ≈ 0,2083, or 20.83%.
Conclusion: The financial results analyzed enterprise in 2012 turned out to be more than in 2011 by 20.83%.
Conclusion
Once we figured out how to calculate the rate of growth and rate of growth, we note that, based on just one indicator is not possible to unambiguously correct assessment of the phenomenon investigated.For example, it may well be that the value of the absolute growth of profit increases and slows down the development of the enterprise.Therefore, any signs of dynamics must be analyzed together, that is complex.
