Sales Growth Ratio Formula & Analysis

Definition: Sales Growth Ratio/Rate is a measure of the percentage increase in sales between the two time periods.

Formula:

Sales Growth Rate = (Current month's sales - Last month's sales) / (Last month's sales) * 100
Or,
Sales Growth Rate = (Current Year's sales - Last Year's sales) / (Last Year's sales) * 100

Example 1:
Sales in 2008 = $700,000
Sales in 2009 = $900,000
Sales Growth Rate = (900,000 - 700,000) / 700,000 * 100 = 28.57%

Example 2:
Company A: Sales in November $50,000; in December $60,000
Company B: Sales in November $30,000; in December $50,000
 Then, the Sales Growth Rate for:
Company A = (Sales of current period – Sales of previous period) / Sales of previous period = (60,000 - 50,000) / 50,000 * 100% = 20%
Company B = (50,000 - 30,000) / 30,000 * 100% = 66.67%
Based on the above calculation, Company B has outperformed Company A.

* Next: Price to Sales Ratio Formula & Example
0 comments: