Finding simple average growth rate

**jonnyyyl** · 01-30-2012, 10:45 PM

Hi all,

I have a situation where I'm trying to look for asset growth.
I know that CAGR does the compounding growth, but I'd trying to find the simple individual asset growth? That is, find the growth rates between 1990-91 and onwards, and average them.

Is there an excel command similar to CAGR(xxx,xxx,xx), but finds the simple asset growth?

Thanks.

Attached spreadsheet is a sample of my situation.
Thanks.

**shg** · 01-31-2012, 01:28 AM

The actual growth rate is

=(M2/B2)^(1/(COLUMNS(B2:M2)-1)) - 1 ~ 23% per year.

LOGEST would tell you the best fit growth rate.

**jonnyyyl** · 01-31-2012, 08:42 AM

Originally Posted by shg

The actual growth rate is

=(M2/B2)^(1/(COLUMNS(B2:M2)-1)) - 1 ~ 23% per year.

LOGEST would tell you the best fit growth rate.

Would it not work on a negative number? Suppose I apply this to net income, and either M2 or B3 is negative.

Thanks for the LOGEST reccomendation. I'm not familiar with it, would you mind telling me what it is and how it works? Thanks

**shg** · 01-31-2012, 12:32 PM

Constant growth means a constant percentage change in something period over period. There's no meaningful interpretation when either number is negative.

If growth is positive, the something will increase without bound. If growth is negative, it will gradually decrease to zero.

Thanks for the LOGEST reccomendation. I'm not familiar with it, would you mind telling me what it is and how it works?

Perhaps you could read about it in Help and post back with anything you don't understand.