Trailing Growth

Trailing Growth is an important metric for any Chief Revenue Officer to understand and grow.

What is Trailing Growth


This metric indicates how the business is performing based upon the last fixed set of months as compared to the same time period a year ago.

As with any growth predictor, it is not a perfect indicator, but it does provide a reasonable picture of your business today.

While not perfect, it is one of the more common KPIs used by investors to determine business potential and should be a number the Chief Revenue Officer is aware of in their regular tracking.

How to Calculate This Metric

What is trailing growth?As noted above, this metric essentially replaces the performance during a period of time in your last fiscal year with the current performance in your current fiscal year.  Let’s take a look at the trailing 6-month growth as an example, using revenue.

The assumptions for this example are:

  • We are currently at July 1st, 2021.
  • We are operating on a fiscal year the same as the calendar year.
  • From January 1st through June 30th of 2020, your revenue was $10M.
  • You ended your 2020 fiscal year with $25M in revenue.
  • From January 1st through June 30th of 2021, you have revenue of $17M.

To calculate the trailing 6-month growth:

(New Growth in Period – Growth in Prior Period) + Prior Period Revenue.

So,

($17M – $10M) + $25M

Trailing 6-Month growth  in this example works out to $32M.

Calculator for Calculating Growth