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geometric average

Forums › ACCA Forums › ACCA FM Financial Management Forums › geometric average

  • This topic has 4 replies, 5 voices, and was last updated 12 years ago by oogabooga.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • June 5, 2010 at 6:42 pm #44447
    mrtimbg27
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Can anyone clarify this calculation formula please?
    Thanks, Tim

    June 6, 2010 at 8:35 pm #62209
    Amarain
    Member
    • Topics: 5
    • Replies: 67
    • ☆☆

    Hi,
    I believe you mean this one:
    you have for example 5 years so 4 periods of growth (from yr 1 to 2, 2 to 3, 3 to 4 and 4 to 5). Then to see the geometric growth divide the newest data between the oldest and calculate the root. (if you are considering three periods you will calculate the 3 root. If two the square root and so on and finally deduct 1 and multiply by 100 to get a percentage.
    2004
    26
    2005
    23
    2006
    21
    2007
    19
    2008
    40
    to calculate growth from 2004 – 2008 put 40/26 then the 4 root, deduct 1 and multiply by 100 to get the percentage.
    if you want to calculate growth from 2004 to 2006, 21/26 square root (because two periods of growth) and then less 1 multiply by 100.
    hope this helps
    Amarain

    October 30, 2013 at 11:13 am #144127
    ttmuyonga
    Member
    • Topics: 0
    • Replies: 1
    • ☆

    not working Amarain.

    November 5, 2013 at 6:08 pm #144635
    oogabooga
    Participant
    • Topics: 1
    • Replies: 36
    • ☆

    (latest dividend \ earliest dividend)1/n -1

    n=years of growth

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