2. multiply all those numbers (5) together
3. take the 5th root of that figure...e.g. 2.03034^1/5..(the 2.3034 number is just an example, I didn't do the math)
4. subtract 1.0 from that number, this is your annual compound growth rate over the period
(note: I'm assuming you want a geometric mean for the growth rate, not an arithmetic mean. My instructions give you the geometric mean, subtracting 1.0 from each number and then summing those numbers after step 1, and then dividing that number by 5 would give you the arithmetic mean.)
To forecast for '14 and 15...
Use sales # in 2013 multiply by 1 + geometric mean = 2014 forecast sales
Use 2013 sales and multiply by (1 + geometric mean)^2 = 2015 forecast sales
[alternatively, use 2014 forecast and multiply by (1 + geometric mean) = 2015 sales ]
Sale over the past 5 years were
2008 -7.5 Million
09-10
10-12.5
11-16.2
12-22
2013-28.5
Using the average growth rate to forecast revenues for the next year 14 and 15
What is the Formula to figure out this problem?
