How to calculate sales growth rate?

Sales growth rate is calculated by subtracting net sales of the prior period from net sales of the current period. Divide that result by the prior period's net sales, then multiply by 100 to express it as a percentage. It is a key indicator of business expansion or contraction.

Formula

Sales Growth % = ((Current Sales − Prior Sales) ÷ Prior Sales) × 100

Worked Example

Sales were $50,000 in Q1 and $60,000 in Q2:

1. Difference: $60,000 − $50,000 = $10,000
2. Divide by Prior: $10,000 ÷ $50,000 = 0.20
3. Percentage: 0.20 × 100 = 20%

Result: Sales grew by 20% quarter-over-quarter.