How to Calculate Profit Growth

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Profit is the amount of money a company makes after deducting expenses. From year to year, or even month to month, profits will change. Companies normally want profits to grow. To calculate profit growth, analysts use a percent-change formula. This shows the percentage the profit grew from one period to another. Analysts can use any period to determine the profit growth, such as weekly, monthly, quarterly, semi-annually or annually.

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Determine the current profits and the previous profits for the company. For example, Company A had \$100,000 in profits this year, and last year had a profit of \$80,000.

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Subtract the prior profits from the current profits. In the example, the difference in profits equals \$20,000, \$100,000 -- \$80,000.

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Divide the difference between the profits by the prior profits. In our example, \$20,000 / \$80,000 equals 0.25, or a 25 percent increase in profits.