In this post I’ll show you a quick excel shortcut for calculating a rate of change. Rate of change is defined as the “rate at which one quantity changes in relation to another”. You may be looking at spending over time, changes in prices, website traffic, social media engagements, or any number of different metrics.
While you may already know what a rate of change is, you may not know this shortcut!
Example 1: The Classic Formula (no shortcut)
In the picture above, we’ve calculated the Year over Year (YOY) change in revenue. Here’s the formula
(New Revenue - Old Revenue) / Old Revenue
You may also hear the adage “New minus old divided by old”. It’s a pretty simple formula to understand, and in our example we can see that YOY revenue is down almost 35% in January.
While this may not seem like a big deal to create, imagine if you’re creating a model with dozens of tabs or you’re calculating rate of change within a much larger formula? In addition, if you’re not using keyboard shortcuts, you may have to bounce back and forth between cells using the mouse just to select the data you need. Overall, it can turn in to quite a waste of time.
Anything we can do to cut down on time to create formulas is money in the bank.
Example 2: The Shortcut
Our new formula is
New Revenue/Old Revenue -1
That’s it! So much easier to type and Excel produces the same results. No open and closing parentheses needed here.
Have fun speeding up your workflow with this one.