Month Over Month Growth: Formula, Examples and Common Mistakes
How to calculate month over month growth, with the formula, a worked example, spreadsheet formulas, average monthly growth, and the mistakes that quietly distort the number.
Month over month growth tells you how much a number changed compared with the previous month. It is one of the most common figures in business reporting, used for revenue, sign-ups, orders and active users, and also one of the easiest to get subtly wrong. This guide covers the formula, a worked example, how to calculate it in a spreadsheet, and the mistakes that most often distort the result.
The month over month growth formula
The calculation compares the current month with the month before it:
Month over month growth = (this month − last month) ÷ last month × 100
The result is a percentage. A positive value means the number grew; a negative value means it fell. Last month's value is always the base, so a change is measured relative to where you started.
A worked example
Suppose monthly revenue looks like this:
| Month | Revenue | Change on previous month |
|---|---|---|
| January | $40,000 | — |
| February | $46,000 | +15.00% |
| March | $43,700 | −5.00% |
| April | $48,070 | +10.00% |
February's growth is (46,000 − 40,000) ÷ 40,000 = 15%. March is (43,700 − 46,000) ÷ 46,000 = −5%. April is (48,070 − 43,700) ÷ 43,700 = 10%.
Each rate is calculated on a different base, which matters as soon as you start summarising them.
Calculating it in a spreadsheet
In Excel or Google Sheets, with months in column A and values in column B starting at row 2, put this in C3 and fill down:
=(B3-B2)/B2
Format column C as a percentage. To avoid a division error when the previous month is zero, wrap it:
=IF(B2=0, "", (B3-B2)/B2)
Leaving that cell blank is more honest than showing an enormous percentage. Growth from zero has no meaningful rate.
Average monthly growth: why a simple average misleads
It is tempting to average the monthly rates. In the example, (15% − 5% + 10%) ÷ 3 gives 6.67%. But if revenue really grew by 6.67% every month for three months, January's $40,000 would end at about $48,550, not the actual $48,070.
The accurate figure is the compound monthly growth rate (CMGR):
CMGR = (last value ÷ first value)^(1 ÷ number of months) − 1
Here that is (48,070 ÷ 40,000)^(1/3) − 1 = 6.32%. Apply 6.32% three times to $40,000 and you land exactly on $48,070. Use CMGR whenever you report an average rate over several months.
Common mistakes with month over month growth
- Ignoring month length. February has 28 days and March has 31, so raw totals are not like-for-like. In the example, March revenue fell 5% in total, but revenue per day fell from about $1,643 to $1,410, a drop of 14.19%. For daily-driven metrics, compare daily averages.
- Reading seasonality as momentum. A December spike in retail or a summer dip in B2B sales is normal for the calendar, not a trend. Compare with the same month last year as well.
- Mixing percent and percentage points. If conversion moves from 2% to 3%, that is one percentage point but 50% growth. Say which one you mean.
- Comparing a partial month. A month that is half over will almost always look like a decline. Compare the same number of days, or wait for the month to close.
- Hiding the inputs. A growth rate without the two underlying values cannot be checked. Show both months next to the percentage.
Charting month over month changes
Two charts cover most needs. A line chart of the underlying values shows the trend and makes seasonality visible; you can build one in the browser with the line graph maker. A bar chart of the monthly growth rates, with negative bars below the axis, makes good and bad months easy to spot; the bar graph maker handles that, and you can switch between related chart types on the same data without re-entering it.
Show the calculation, not just the result
The most useful habit is to publish the formula and inputs next to every growth number. Readers can check the result themselves, and errors such as a wrong base month or a partial period become obvious. The ToCharts AI analysis sample takes this approach with sample business datasets: each case lists its inputs and metric definitions, and you can inspect the calculated rows behind every result.
What this can't do yet
ToCharts makes bar, horizontal bar, line, area, pie and donut charts in the browser; it has no scatter, radar, bubble, gauge or heatmap chart types. Chart export is limited to what the in-browser chart maker renders, and there is no server-side batch chart generation API for producing many growth charts automatically.
Frequently asked questions
How do you calculate month over month growth?
Subtract last month's value from this month's value, divide by last month's value and multiply by 100. For example, going from 40,000 to 46,000 is (46,000 − 40,000) ÷ 40,000 = 15% growth.
What is a good month over month growth rate?
It depends on the stage and the metric. Early-stage products often report double-digit monthly growth on small bases, while established businesses may consider low single digits healthy. Compare against your own history and the same month last year rather than a universal benchmark.
How do I calculate average monthly growth over several months?
Use the compound monthly growth rate: divide the final value by the starting value, raise the result to the power of one divided by the number of months, and subtract one. A simple average of monthly percentages overstates growth when rates vary.
What is the difference between month over month and year over year growth?
Month over month compares a month with the one directly before it and reacts quickly to change. Year over year compares a month with the same month a year earlier, which removes most seasonal effects. Reporting both gives a more reliable picture.
Can month over month growth be calculated when last month was zero?
No meaningful percentage exists when the base is zero, because the division is undefined. Report the absolute change instead, and leave the percentage blank in your spreadsheet.