GROWTH

The GROWTH function is used to predict exponential growth based on existing data points. It calculates the predicted exponential growth rate of a given set of known y-values (dependent variable) against a set of known x-values (independent variable). This function is commonly used in statistical analysis, forecasting, and trend analysis.

Syntax

=GROWTH(known_y's, known_x's, new_x, const)

known_y's The set of y-values representing the dependent variable.
known_x's The set of x-values representing the independent variable.
new_x The new x-value for which you want to predict the corresponding y-value.
const A logical value that specifies whether to force the constant "b" in the equation y = mx + b to be equal to 0. By default const is FALSE.
Skip Note that the "Skip" argument is not supported in current versions of Excel.

About GROWTH

When you need to extrapolate future trends or understand the exponential growth pattern of a dataset, the GROWTH function steps in as a valuable tool in Excel. It generates a growth trendline based on given data points, providing insights into the potential direction of a set of values over time, such as sales figures or population growth rates. By fitting a line to your data and projecting it forward, GROWTH supports informed decision-making and planning in various fields, including business, finance, and research. GROWTH operates by calculating the exponential trendline that best fits the specified known y-values corresponding to the known x-values. It then applies this trendline to predict the y-value associated with a new x-value, aiding in forecasting and trend analysis.

Examples

Suppose you have data points representing the growth of a particular product over time. The known x-values (months) are 1, 2, 3, 4, and 5, and the known y-values (sales in thousands) are 10, 15, 25, 35, and 55. To predict the sales for month 6, you can use the GROWTH function as follows: =GROWTH({10, 15, 25, 35, 55}, {1, 2, 3, 4, 5}, 6)

Consider a scenario where you have historical data on the revenue growth of a startup. The known x-values (years) are 1, 2, 3, 4, and 5, with corresponding known y-values (revenue in millions) of 2, 4, 8, 16, and 32. To estimate the revenue for year 6 while forcing the constant to be 0, you can use the GROWTH function with the const argument set to TRUE: =GROWTH({2, 4, 8, 16, 32}, {1, 2, 3, 4, 5}, 6, TRUE)

Questions

What does the const argument in the GROWTH function do?

The const argument in the GROWTH function specifies whether to force the constant term in the growth equation y = mx + b to be 0. By default, const is set to FALSE, but you can set it to TRUE to constrain the model with a zero constant.

How does the GROWTH function assist in forecasting future values?

The GROWTH function calculates an exponential trendline based on existing data points, allowing you to predict future values by extending the trend into new x-values. It assists in forecasting by providing insights into potential growth patterns and trends.

Can the GROWTH function handle irregularly spaced data points?

The GROWTH function requires a set of evenly spaced known x-values and corresponding y-values to predict growth accurately. Irregularly spaced data points may lead to less reliable growth predictions.

Related functions

FORECAST
LINEST
TREND
LOGEST
GROWTH