How to calculate a rate of sale

Written by melvin richardson
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How to calculate a rate of sale
The rate of sale is a simple formula. (George Doyle/Stockbyte/Getty Images)

In business it is important to be able to calculate a rate of sale. If the rate of sale is declining from one year to the next, it’s important to identify why there is a variance. Adjustments can sometimes be made, such as improving advertising or eliminating a product or service, so the rate of sale can increase. You can calculate the rate of sale if you have certain sales information pertaining to your business. Economic trends could be responsible for changes in the rate of sale.

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  1. 1

    Find out the time frame you are calculating the rate of sale for. The rate of sale can be calculated daily, monthly, quarterly or annually. Get the correct formula, using the time frame of your choice, to calculate the rate of sale.

  2. 2

    Identity the amount of product sold for each period. For example, if you sold £20 million of product in April and £75 million in the month of May, the sales rate can be calculated on a monthly basis.

  3. 3

    Review the sales rate formula. To get the sales rate, subtract the previous month's sales from the current month's sales. Divide by the previous month's sales, and then multiply the result by 100. Based on the previous example, you would take £20 million and subtract it from £75 million and get £55 million. The £55 million represents the growth. Divide the £55 million by £20 million, which is 2.75; multiply this result by 100 to get a 275 per cent rate of sales growth from April to May.

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