growth formula to predict sales for this year

Hey guys,

Sorry about this being in the wrong section (if it is). Well excel is never my strong point.

What I am trying to do is, do a growth formula to predict sales for this year. I currently have previous years sales for 4 years and the annual growth is 3% per year.

The data values are
Year 03 - 463
Year 04 – 658
Year 06 – 450
Year 07 – 126

The idea I had was to use an average formula and then * it by 0.03. But I have been told there are other, better methods. Any suggestions

Originally Posted by davesexcel

Who told you there is a better way without telling you what it is?
Maybe check out the growth formula in excel help,
course with your example, there is no growth

One of my friends but i have not had the chance to talk to them. But the number i gave you were forr one item over a period of 4 years.

the forumula I put down, would that work better?

Originally Posted by davesexcel

I am not sure, because as the yrs go by the numbers are decreasing, not really possible to show growth
but if you want to use the average formula then go
=average(range)*1.03

As i do that, would i add a round function to the end to make sure its a full number?

Growth is an exponential function. Yours is negative, trending down at 26% per year.

If you plot your revenue versus time on an x-y (scatter) plot, you can add an exponential trendline (right-click on the series, Add trendline) to see the growth curve, and add the equation to see the parameters. An exponential trendline is the best fit of the function y = a * exp(k*x) solved for a and k. The parameters for your data are

y = 1611 * exp(-0.298 * x)

That's equivalent to y = 1611 * 0.74 ^ x, which says that each year will have 74% of the prior year's revenue.

You can use the GROWTH function to predict future revenues:

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... which yields,

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BTW, did you notice you're missing data for year 5?