# How To Calculate The Growth Rate

## Video: How To Calculate The Growth Rate

The concept of "growth rate" allows you to make a dynamic analysis of the rate and intensity of the development of the phenomenon as a result of comparing the values ​​obtained at certain intervals. In addition to the growth rate, these analytical studies include indicators such as absolute growth, growth rate, and the absolute value of one percent of growth. They are used to analyze the dynamics of processes in industry, economics, and finance.

## Instructions

### Step 1

Determine what dynamic indicators you need to calculate: chain, basic or average for the entire analyzed period. Chain indicators are indicators that characterize the intensity of changes in values ​​from period to period or from date to date within the boundaries of the analyzed period. Baselines refer to the period defined as the base, usually the starting level of the values ​​in the period being analyzed. The growth rate is expressed as a percentage of the base or previous period. If it is expressed as a simple ratio of two compared values, then it is called the growth rate.

### Step 2

Determine the absolute values ​​of the increase in indicators (Pi), they are equal to the difference between the two compared levels. The growth coefficient (Ki), chain or base, is calculated as the ratio of current indicators to indicators of the previous or base period.

The basic growth rate (KB) is:

KB = Pi / Po, The chain growth factor (Kts) is equal to:

Kts = P i / Pi-1, where:

Pi - the current absolute values ​​of the increase in values, Po - the value of the indicator of the base period, Pi-1 - absolute indicators of the values ​​of the previous period.

### Step 3

Express the growth rate as a percentage and you get the growth rate (Tp):

Tr = Ki * 100%.

### Step 4

The semantic and statistical load of the baseline and chain growth rate is different. With the help of basic indicators, you can reflect the intensity of their change for the entire period since the beginning of measurements. Through chain growth rates - the intensity of changes in fixed time intervals. In general, the growth rate shows what percentage the level of the current period is from the initial, baseline value of the indicator. It is easy to see that the product of the values ​​of the chain growth rates should be equal to the basic growth rate for the analyzed period.