Expected annual growth rate

A printable cheatsheet with calculations
and notes

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Expected annual growth rate

Annual growth rate =

Ending value

Beginning value

- 1

AKA: simple growth rate or average annual growth rate (AAGR)

INTERPRETATION

The expected annual growth rate measures the increase or decrease in the value of an investment or revenue stream in a given year.

Business owners, managers, and other interested parties use it to detect a year’s trends and compare growth between multiple years.

Note: expanded calculation

Divide yearly growth at the beginning of a year by the total value of that growth at the end of the year

BENCHMARK: HA, PG, EB, ROT

A healthy growth rate is usually sustainable for a company. 

A good target is between 15% and 25% per year.

Accounts Receivable Expected annual growth rate:

ABBREVIATION KEY:

ROT: Rule of thumb
HA: Historical Average (organization’s historical average)
PG: Peer Group average
EB: Economic Benchmark

DISCLAIMER: The interactive calculators on this site are self-help tools intended to help you visualize and explore your financial information. They are not intended to replace the advice of a qualified professional. Because each business is different, we can not guarantee accuracy.