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Summary: In order to calculate market growth, compare the change of one period to the change of a subsequent period of time. Discover how market growth is the amount of the market that a product is capturing compared to previous years with help from two accountants in this free video on business calculations and accounting.
Spencer Cottam and Jeannine Smith work together at Account Team in Salt Lake City, Utah.read more
"My name is Spence. I'm with the Account Team in Salt Lake City. We help people take care of their books and their tax problems and just sort out the mess. It has been in the closet for 10 years and you never quite got to it. Today, I'm going to talk about market growth. In large companies and using the supplies of the nationwide companies, they look at the total market. For example, Coca-Cola. They know that there's so much soda pop consumed in the United States and they know that they may sell 35% of that soda pop. And if last year they sold 35% and this year they sold 37%, then they've had a 2% market growth. That would be a good increase for the management so they're doing a good job and probably worth investing in those managers. Market growth has to be evaluated over a couple of periods whether it's a two quarters or over two different years or a certain period of time. So, you can compare the change of one period compared to the subsequent period. Market growth is how much of the market your product is capturing compared to a previous year or previous period."
eHow Article: How to Calculate Market Growth