# growth formula to predict sales for this year

1. ## 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

2. Originally Posted by ipodman
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
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

3. 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?

4. Originally Posted by ipodman
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?
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

5. 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?

6. 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:

``Please Login or Register  to view this content.``
... which yields,
``Please Login or Register  to view this content.``
BTW, did you notice you're missing data for year 5?

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