How to Calculate a Growth Ratio


Calculating the growth rate involves a simple math equation -- the same equation used to calculate the slope of a line on a graph. The growth rate can be used in a variety of areas, including investing purposes to calculate earnings per share or personal finance to calculate the growth of your investments. The growth rate formula requires two points of data, the starting point and the future point.

Things You'll Need

  • Calculator
  • Find your two points of data. For example, if you invested in a stock at $20 and it grew to $30, you might like to calculate the growth between the starting price and current price.

  • Subtract the oldest piece of data from the most recent data. Returning to the example, the correct formula is $30 - $20 = $10.

  • Divide your answer in Step 2 by the original piece of data, then multiply by 100. ($10 / $20) x 100 = 0.5 x 100 = 50 percent. The growth ratio is 50 percent. The full formula is ((X2 - X1) / X1) x 100 = growth rate.

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