Using Growth Rate

How to use the Growth Rate method



The growth rate projection method in PlanGuru allows the user to forecast their accounts based upon their expected growth over time. The growth rate projection method will be accessible either when you are adding a new account, or editing a current one.


Once the growth rate method is selected, you'll notice there are two ways the growth rate can be applied: Year over Year, or Month over Month.



Selecting the Year over Year method will apply the growth rate you have inputted to the previous year's data. So based on the example above, the data that appears in January 2019 will be 3% higher than the data in January 2018, February 2019 will be 3% higher than the data in February 2018, and so on.


The Month over Month growth rate, however, will grow your projections on a monthly basis. If I were to use my same growth rate of 3% but instead on a monthly basis, the data in January 2019 will now be 3% higher than the data in December 2018, the data in February 2019 will be 3% higher than the data in January 2019, and so on.


Your growth rate does not have to be the same throughout, you can input different growth rates in each month where applicable.



You can also link your growth rate to an assumptions account that you've created in the Assumptions & KPI's tab. You can do this by selecting "Link to Assumptions Category" in the Growth Rate Source section. Please note that the assumptions needs to be formatted as a percent in order to be linked to the growth rate projection.




You can also select the month/year that you would like your growth rate to project over. Selecting First Historical Month/Year will use the data from your first historical month/year to begin the growth rate projection in your first projected year. However, if I chose to start my growth over 2020, PlanGuru would then take the data from 2020 and apply the growth rate to 2021. 



Once you apply the growth rate, your account in PlanGuru will update to reflect the projection you've set. You'll notice that the months that do not have a growth rate applied to them will stay as manual entry, while the accounts that do will appear as a formula that cannot be manually edited. If you look at the example below, I set up a growth rate of 3% to start the growth over April 2019. Because of this, April 2019 is the last month that appears as a manual entry, while May 2019 begins as a formula that implements the growth rate.