How to calculate average monthly growth rate

How to calculate average monthly growth rate

In data analysis, investment evaluation or business growth forecasting,average monthly growth rateis a key indicator. It can help quantify the average growth of a certain metric (such as revenue, number of users, etc.) over consecutive months. The following are calculation methods and structured data examples that have been hotly discussed on the Internet in the past 10 days.

1. Definition of average monthly growth rate

The monthly average growth rate reflects the average growth percentage of a certain indicator between adjacent months. The calculation formula is:

Average monthly growth rate = [(final value / initial value)^(1/number of months) - 1] × 100%

2. Calculation steps

1. Determine the initial value and final value (such as January and December data).
2. Calculate the total growth rate (final value ÷ initial value).
3. Take the square root (the root of the number of months).
4. Subtract 1 and multiply by 100% to convert to a percentage.

3. Example demonstration

Assume that a company has 1 million users in January and increases to 1.46 million users in May. Calculate the average monthly growth rate:

1. Initial value=100, final value=146, number of months=4 (February to May).
2. Total growth rate=146/100=1.46.
3. Take the fourth root ≈ 1.0995.
4. Average monthly growth rate = (1.0995-1) × 100% ≈ 9.95%.

4. Precautions

1. If the data fluctuates greatly, it is recommended to combinemoving average methodSmoothing.
2. Distinguish when negative growth occursdecay rateand growth rate.
3. In long-term trend analysis, you can useCompound annual growth rate (CAGR).

5. Association of hot topics across the entire network

Recently hotly discussed“Growth in Penetration Rate of New Energy Vehicles”(average monthly growth of 2.3%),“AI large model user growth rate”(Monthly average 18%) and other cases are quantified by this method. The following table shows simulated data:

Summary: The monthly average growth rate is a powerful tool for quantifying short-term growth. Combining the calculation method with specific scenarios can guide decision-making more accurately.