Hi..
I'm frustating about the growth formula like this.. :rolleyes:

Let's say,
- profit in 2006 = -5000
- profit in 2007 = 1000

what's the formula to find the growth 2007 compared to 2006 ?

Thanks for your answer.

Good afternoon budi4u...
I am going to try to help you with this by doing it two ways. I'll give you the basic way to get your answer, that I think is correct, than some things I've learned when figuring out these types of equations. However, I am not the expert, more of a student of the formula myself. But I hope it helps.

You need to figure out what the simple straight-line growth % is. Which is the increase divided by the 2006 profit loss. Don't get confused by the word (growth) when starting with a profit loss.

Key points to keep in mind going forward is there are basic formulas that work for most scenarios when figuring out final answers. Though in this question you used the word (profit) as the definition of growth. Knowing the definition, or what they are looking for, depends on what the definition of growth is in the given equation.

Example; are they asking for profit growth, revenue growth, market share growth? Those are just a few examples. Growth is the critical word.

A basic idea is that once you know which growth definition you are trying to get you can fill in the blank. Increase divided by _______ = ?

Another basic idea is that when figuring something in a percentage is taking the old minus the new divided by the old.

Does this help? I hope so... Good luck to you.

It is a bit of a problem!

Suppose profit in 2006 = 1
in 2007 = 1000

Increase = 99900% (999/1 times 100)

So, if profit in 2006 was 0, Increase percent = Infinity!

So you cannot really represent the growth by percentages when 2006 figure is zero or negative!

Perhaps a better way is to represent the situation by a graph.

ANOTHER WAY

Growth in 2007 = 6000/1000 times 100 = 600% of the profit in 2007.

Growth in 2007 = = 600% of the profit in 2007.