Net Income Growth

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DBarajas

Jul 16, 2008, 01:02 PM

I know that we can use this formula to calculate the net income growth:

Net Income Growth = (Actual Net Income - Previous Net Income) / Previous Net Income

But apparently this formula does not works if I have a negative net income

for example... how can I calculate the Net Income Growth with this information:

Net Income 2007 = -182.65

Net Income 2006 = -751.98

morgaine300

Jul 19, 2008, 10:32 PM

It still works. The movement of the change is still in a positive direction. If you subtract a negative 2007 from the negative 2006, you're going to get a positive answer. And still divide that by 2006. (The only thing you have to change is that the division would be a negative number and it's actually a positive change.)

Even if it was a "negative growth," it still works. It's just that the change would be negative.