You can use historical time-based data to forecast growth rates if you have it. When you make the forecast, Excel generates a brand-new worksheet with a table of past and future values and a chart that visualizes the information. You can use a projection to anticipate upcoming sales, inventory needs, or consumer trends. In addition, you can use different functions and formulas to forecast growth rates. So, this article demonstrates 6 methods to forecast a growth rate in Excel.

**๐ Download Excel File**

You can download the Excel file used for the demonstration from the link below.

## Learn to Forecast Growth Rate in Excel with These 6 Methods

First, familiarize ourselves with the dataset used as an example throughout the article. We want to forecast the companyโs sales for 2020 using its yearly sales from 2010 to 2019. Therefore, we will use this dataset to illustrate 6 straightforward techniques to forecast a growth rate in Excel.

**Approach 1**

**1. Applying GROWTH Function**

In this method, we will demonstrate the use of **GROWTH** function to forecast growth rate in Excel. The **GROWTH** function predicts exponential growth of the existing data. This function returns y-values for the existing set of x-values and y-values for a specified new x-value. Let us go through the steps to apply this function to calculate the Sales, Revenue, and Annual Sales in Excel.

**GROWTH Function**

#### 1.1 Calculating Sales Growth

This method calculates a yearโs revenue based on previous yearsโ revenues using the **GROWTH** function in Excel. Let us go through the steps to apply this function.

**โฌ๏ธโฌ๏ธ STEPS โฌ๏ธโฌ๏ธ**

- First, select cell
**C18**. - Then, insert the formula.

**=GROWTH(C6:C15,B6:B15,B18)**

- Then, press
**Enter**.

Here, **GROWTH** function predicts the sales for the year in cell **B18 **which is the new x-value based on the previous x-values **B6:B15 **and y-values **C6:C15**.

**GROWTH Function**

#### 1.2 Calculating Revenue Growth

This method predicts a yearโs sales based on previous yearsโ sales using the **GROWTH** function in Excel. Let us go through the steps to apply this function.

**โฌ๏ธโฌ๏ธ STEPS โฌ๏ธโฌ๏ธ**

- First, select cell
**C18**. - Next, insert the formula.

**=GROWTH(C6:C15,B6:B15,B18)**

- And, press
**Enter**.

Here, **GROWTH** function predicts the revenues for the year in cell **B18 **which is the new x-value based on the previous x-values **B6:B15 **and y-values **C6:C15**.

**GROWTH Function**

#### 1.3 Calculating Annual Sales Growth

This method calculates the annual sales for a set year based on the annual sales of previous years using **GROWTH** function in Excel. Let us go through the steps to apply this function.

**โฌ๏ธโฌ๏ธ STEPS โฌ๏ธโฌ๏ธ**

- First, select cell
**E6**. - Then, insert the formula.

**=GROWTH(C6:C16,B6:B16,D6:D16,TRUE)**

- And, press
**Enter**.

Here, **GROWTH** function predicts the annual sales for the years in cells **D6:D16 **which is the new x-value based on the previous x-values **B6:B16 **and y-values **C6:C16 **and **TRUE** is a constant that selects **b** normally.

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**Approach 2**

**2. Using FORECAST Function**

In this method, we will demonstrate the use of **FORECAST** function to forecast growth rate in Excel. The **FORECAST** function uses existing values to determine or forecast a future value. A y-value for a specific x-value is the future value. This function uses linear regression to predict the future value using known x-values and y-values for the current values. You can use these functions to forecast future sales, inventory needs, or consumer trends.

Let us go through the steps to apply this function.

**โฌ๏ธโฌ๏ธ STEPS โฌ๏ธโฌ๏ธ**

- First, select cell
**C18**. - Then, insert the formula.

**=FORECAST(B18,C6:C15,B6:B15)**

- And, press
**Enter**.

Here, **FORECAST**ย predicts the sales for the year in cell **B18 **which is the new x-value based on the previous x-values **B6:B15 **and y-values **C6:C15**.

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**Approach 3**

**3. Applying TREND Function**

This method will demonstrate the use of **TREND **function to forecast growth rate in Excel. **TREND** returns values that follow a linear trend. The known y and known x values in the array are fitted to a straight line using the least squares method and return the y-values along that line for the array of new x values you provide.

Let us see the steps to apply this function.

**โฌ๏ธโฌ๏ธ STEPS โฌ๏ธโฌ๏ธ**

- First, select cell
**C18**. - Then, insert the formula.

**=TREND(C6:C15,B6:B15,B18,)**

- And, press
**Enter**.

Here, **TREND **predictsย the sales for the year in cell **B18 **which is the new x-value based on the previous x-values **B6:B15 **and y-values **C6:C15**.

**๐ Read More: ****5 Easy Methods to Add 10 Percent to a Number in Excel**

**Approach 4**

**4. Utilizing Analysis Toolpak**

This method will apply the **Analysis Toolpak **feature to forecast a growth rate in Excel. This method will use the Exponential Smoothing Data analysis tool from the **Analysis Toolpak**. Hence, we have created another column named **Forecasted Sales** for the output.

Let us see the steps to apply this feature.

**โฌ๏ธโฌ๏ธ STEPS โฌ๏ธโฌ๏ธ**

- Initially, click on the
**File**menu and select**Options**.

- Next,
**Excel Options**named box will appear. Click on**Add-ins**. Then, under the**Manage**option, select**Excel Add-ins**and click on**Goโฆ**

- Then, another box named
**Add-ins**will appear. Click on the**Analysis Toolpak**option and press**OK**.

- Next, select
**Data Analysis**from**Dataย**tab.

- After that, a box named
**Data Analysis**will pop up. Select**Exponential Smoothing**as**Analysis Tools**and press**OK**.

- Then, the
**Exponential Smoothing**box will appear. Insert**$C$6:$C$15**as the**Input Range**,**5**as the**Damping factor**,**$D$6:$D$16**as the**Output Range,**andย press**OK**.

- Lastly, the result looks like this.

**๐ Read More: ****3 Quick Ways to Add 20 Percent to a Price in Excel**

**Approach 5**

**5. Employing Exponential Smoothing**

In this method, we will employ **Exponential Smoothing **manually using a formula. So, for applying the formula, we have taken **ฮฑ **as a constant whose value is 0.5 and taken an initial forecast based on the sales of the first two years. Hence, we have created another column named **Forecasted Sales** for the output.

Now, let us see the steps.

**โฌ๏ธโฌ๏ธ STEPS โฌ๏ธโฌ๏ธ**

- First, select cell
**D7**and insert the formula. - Then, pressย
**Enter**.

**=($C$18*C6)+(1-$C$18)*D6**

- Lastly, drag down the
**Fill Handle,**and we will have the sales for the year 2020.

**๐ Read More: ****Calculate Percentage in Excel Using Absolute Cell Reference**

**Approach 6**

**6. Using Forecast Sheet**

Now, we will demonstrate how to **Create a Forecast Sheet** to forecast growth rate in Excel. So, let us see the steps.

**โฌ๏ธโฌ๏ธ STEPS โฌ๏ธโฌ๏ธ**

- First, select cells containing the data
**B6:C16**. - Next, go to
**Data**tab, click on**Forecast**group and select**Forecast Sheet**.

- After that,
**Create Forecast Worksheet**named box will pop up. Select the line chart option, insert 2021 in the**Forecast End**option, and click**Create**.

- Lastly, in a new worksheet, we will have a
**new table**and a forecasting graph created.

**๐ Read More: ****2 Ways to Calculate Bacterial Growth Rate in Excel**

## ๐ Important Notes

`๐๏ธ`

The** FORECAST.LINEAR** function, which is now part of the new Forecast functions in Excel 2016, has replaced the **FORECAST** function. However, we suggest using new **FORECAST.LINEAR** function, the previous one is still accessible for backward compatibility.

`๐๏ธ`

While using Forecast Sheet, we can use different options according to our need to forecast the growth. You can find more about this in **Create a Forecast**.

## ๐ Takeaways from This Article

`๐`

ย This article demonstrated 6 approaches to forecast growth rate in Excel.

`๐`

ย In the first method, we showed the use of **GROWTH** function for forecasting growth rates in Excel.

`๐`

ย Then, we demonstrated the **FORECAST** function to forecast.

`๐`

ย Next, we applied the **TREND** function for the same.

`๐`

ย After that, we demonstrated the **Analysis Toolpak** feature to forecast.

`๐`

ย Then, we employed the **Exponentially Smoothing** formula.

`๐`

ย Finally, we employed the **Forecast Sheet** to forecast growth rate in Excel.

## Conclusion

This article has demonstrated 6 ways to forecast growth rate in Excel. All these formulas are incredibly effective and simple to use. We hope this article helps you. Please leave a remark if you have any queries. The author will do their best to find an appropriate answer.

For more guides like this, visit **Excelden.com**.

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