Straight-line growth rate

Last updated: 16.03.2016     Author: Lineární rychlost růstu

Straight-line growth rate (also called as relative change, relative variance, relative difference or % change) method calculates grow rate during the considered periods of time based on the formula:

 (ending value – beginning value) / beginning value

 

Example

 

2-years grow rate between 2012 and 2010 is calculated as (18-15)/15 = 0,2 (20%)

5-years grow rate between 2015 and 2010 is calculated as (21-15)/15 = 0,4 (40%)

 

Straight-line growth rate method is advantageous when the values inside the time series fluctuate.

The disadvantages may include the facts that it considers just ending and beginning value and therefore can show high growth rates even though the reason for such grow is just due to very low beginning value. 



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