How do you annualize in Excel?


Editorial team Published on

To annualize data or returns in Excel, use simple multiplication for basic periodic figures or exponential formulas for compound growth. You can explore more examples and a downloadable file via TheSmartMethod guide.

Simple Annualization (For Revenue or Sales)

To scale a partial-year or monthly total to a full year, multiply the value by the ratio of 12 months divided by the number of elapsed months.

  • Formula: =Value * (12 / Number_of_Months)
  • Example for 2 months of data in cell A1: =A1 * (12 / 2) or =A1 * 6

Compound Annualization (For Investment Returns)

To annualize a short-term percentage return with compounding, use the power formula.

  • Formula for monthly return in cell A1: =(1 + A1)^12 - 1
  • Formula for daily return in cell A1: =(1 + A1)^365 - 1

Annualized Rate of Return Over Multiple Years

To find the Compound Annual Growth Rate (CAGR) based on a starting and ending value over a set number of years, use a power calculation.

  • Formula: =(Ending_Value / Beginning_Value)^(1 / Number_of_Years) - 1
  • Example with ending value in B2 and start in A2 over 5 years: =(B2 / A2)^(1 / 5) - 1