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Author Topic: How to calculate growth?  (Read 16896 times)

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« on: April 27, 2007, 06:41 »
0
Hello all,

I've been trying some things in excel to run some stats and I don't seem to understand how the growth percentage is calculated.

Say:
-january: 10$
-february: 15$
-march: 30$
-april: 20$

Now how should I calculate this monthly growth (or decrease) ? Which is the formula?

Is it for jan vs feb ((15-10)/10)*100 = 50% (+50% of 10 is indeed 15)
Is it for mar vs apr ((20-30)/30)*100= -33% (but here I don't get it...if we take +33% of 20, why come we don't get 30??)

I'm soooo confused about which is the right formula. Can somebody help me with this?

Many Thanks!



« Reply #1 on: April 27, 2007, 06:52 »
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Both formulas are the same.  They are comparing the second month to the first month.

It seems you are getting mixed up with your analysis of the formulas.

In the analysis of the first formula you are applying the % to the first #
(+50% of 10 is indeed 15)

In the analysis of the second formula you are doing the opposite: you are applying the % to the second #
(if we take +33% of 20, why come we don't get 30??)

You should be applying the % to the same #.  So if you take -33% from 30 (the first #) you will indeed get 20.

I hope I didn't confuse you even more.  ???  :P

« Reply #2 on: April 27, 2007, 09:23 »
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1st month (ie Jan) = a
2nd month (ie feb) =b

Growth %  +/-  = ((b-a)/a)*100

If the second month (b) is lower than the first month (a) your growth % will be minus figure.

« Reply #3 on: April 27, 2007, 09:38 »
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The above formula can be simplified to (b/a -1)*100.

With a little practise, you'll be able to "guesstimate" % change by simply dividing b by a.
« Last Edit: April 27, 2007, 09:49 by sharply_done »

« Reply #4 on: April 27, 2007, 09:51 »
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Or......

b<a = 'oh bugger!"

 ;)


« Reply #5 on: April 27, 2007, 12:25 »
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A percentage change is a good indicator of the movement of your income, whether for an individual site or across all your sites. Being able to see those movements over time provides more 'information' from your 'data'.

I don't use percentage changes but I do track my income over time. I also take lessons from my stock market trader friend who's recommended the Moving Average (MA) technique. I've attached my income chart so you can see for yourself. (Being Australian there is a line there which tracks the AUD versus the USD, but you can ignore that)



Basically the blue line is my income (USD). The light-blue, yellow and purple lines are my 3-month, 6-month and 12-month MAs. The MA lines are intentionally smoothed to better indicate trends.

The deal with MAs is they flatten out your stats. If your income goes below your moving average then you're going poorly. Whether each MA is heading up or down, and whether the MAs cross each other, are all indicators. The ideal is to have your income above all MAs and all MAs pointing upwards.

As an example of what this can tell you: Right now with my extrapolated April results, I have my 3 and 12 month MAs pointing upward and in the right order. However my 6-month MA is pointing down and has crossed through BOTH other MAs. This tells me I'm doing ok in the short term, ok in the long term, but in the medium term I'm doing really poorly.

All of this is obviously overkill as I'm not making million dollar trading decisions on the information, unlike my friend. But, it's fun and it's comforting to see from this chart that my microstock activity is viable long-term. I can also get insights into the impact of seasonal changes and periods of my inactivity.

« Reply #6 on: April 27, 2007, 18:55 »
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I use 7 day moving averages together with 5th degree polynomials to keep track of things - I haven't been at this long enough to perform any meaningful statistical trend analyses, so I use my data to mostly track my progress for the time being. Here's my summary chart:


As far as overkill is concerned, I don't think it is. I'm in this full time, and I'm not going to depend on chance or luck to be successful. I think it is completely necessary to be as informed as possible about the state of my income.

Or at least as informed as my puny brain will allow.
« Last Edit: April 27, 2007, 20:51 by sharply_done »

« Reply #7 on: April 27, 2007, 20:46 »
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I use 7 day moving averages together with 5th degree polynomials to keep track of things
Do you track daily figures or weekly figures.

I use to track all sales but dropped down to monthly as it is easier (I can go away for weeks/months and still get the data) and it is suitable for my purposes.  As it is not my job, any more my be over analysis.

« Reply #8 on: April 27, 2007, 21:00 »
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Daily figures.

I usually check my numbers twice a day. I visit them in the morning while I'm uploading - by doubling my overnight sales I can more-or-less tell how the day is going to proceed (I live in a GMT-8 zone). I update my spreadsheets nightly.

« Reply #9 on: April 28, 2007, 18:10 »
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Awesome! I'm really happy to see I'm not alone charting & analysing the trends. I hadn't seen anyone else post their charts before. In fact, it seems you're way ahead. I don't track daily statistics and I had to Google 'polynomials'!

You're right - if you're living from this then it's not overkill to chart & analyse and you need to stay informed. The question that arises is what decisions do you make from your charts?  I saw it as overkill because it doesn't empower me to do anything. I can see which websites perform well against others, but that's obvious just looking at the numbers. How do you use these charts?

Also, what application do you use to make these charts?

« Reply #10 on: April 28, 2007, 18:44 »
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I currently use Excel to hold data and make charts. I'll be switching to Access soon, though - spreadsheets are not so good for holding related bits of information. I need to have things ready once I have enough data - perhaps in another three months. I'll also have to brush up on my statistics so that I can know how relevent/valid my findings are.

I intend to examine the effect that various factors (e.g. framing, submission day, composition, subject, ...) have on my sales - I've read plenty of anecdotal/common sense/pet theory type of stuff, but don't want to base business decisions on anything so ethereal.

« Reply #11 on: April 28, 2007, 18:55 »
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I'm still a bit of a noobie to all of this, having been doing this for only 2-3 months. But since I have the time I created a Google Spreadsheet and keep it updated with daily statistics. I have pretty much filled it with tons of formulas to get all kinds of statistics out of it. I find it interesting to watch the numbers. Since its on Google you can view it online, http://spreadsheets.google.com/pub?key=pwIrwFzkPvFQ6Pgtg12kUbg

It starts with March since that was my first full month on Shutterstock. Istock still reject all my illustrations for not being vectors. So whatever, will be purchasing a 400D here within a month so I can start taking photographs instead of all computer generated submissions.

« Reply #12 on: April 28, 2007, 19:23 »
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Yes, I also plot the trends, probably in a similar way to your system sharply, except that I only plot weekly and I use 4 week and 10 week moving averages to suggest short term and intermediate trend.

My most informative charts are those that plot weekly income divided into total unique images online ($ per image online) and DPI % (weekly downloads per image online).  I can use these numbers to project future income based on production; for instance if I know that my $ per image online is a non-volatile $1.50 I can easily project that 2,000 images should produce a weekly income of $3,000.  It is the volatility that is the unknown quantity, and as with any business plan it makes sense to do some Delta stuff and assume a worse case, a best case and various points inbetween.

« Reply #13 on: April 29, 2007, 22:17 »
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this is the sort of formula we use, though we deal in billions$. But for a home business it should work

http://www.igetit.net/newsletters/Y06_08/CalculateGrowth.asp


 

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