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    DBarajas's Avatar
    DBarajas Posts: 1, Reputation: 1
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    #1

    Jul 16, 2008, 02:02 PM
    Net Income Growth
    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's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Jul 19, 2008, 11:32 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.
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