Am I better off than I was a year ago?

Bottomline compares your key financial metrics year over year to give you a clear answer on whether your business is improving.

What's my business roughly worth?

Bottomline estimates your business value using SDE multiples based on your industry, size, and growth rate.

Am I building equity or just earning a salary?

Bottomline tracks retained earnings growth, margin expansion, and revenue quality to show whether you are building long-term value.

Are my margins shrinking?

Bottomline tracks gross and net margin trends month over month and alerts you when margins decline for two or more consecutive periods.

Is my business healthy right now?

Bottomline checks 7 health signals every month and gives you a single score: Healthy, Caution, or Critical.

What’s my annual growth rate?

Growth rate is the single number that tells you whether your business is expanding, plateauing, or declining. Here's how to calculate yours and what it means for your trajectory.

6 min read

The short answer

What is your growth rate? Compare your last 12 months of revenue to the 12 months before that. The formula: (This year revenue - Last year revenue) / Last year revenue x 100. Example: ($840K - $720K) / $720K = 16.7% annual growth.

Growth rate is the number that affects every other decision

If you are growing 20% per year, you can absorb a new hire, invest in equipment, and tolerate a temporary margin dip because the revenue trajectory supports it. If you are flat or declining, those same decisions become risky.

Growth rate also determines your business valuation. A business growing 20% commands a significantly higher multiple than one growing 3% or declining. It affects your ability to get financing, attract talent, and negotiate with vendors.

But growth rate alone can mislead. Growing 20% while margins shrink 5 points means you are growing revenue but not profit. The healthiest businesses grow both revenue and margins together.

How to calculate your growth rate in QuickBooks Online

1
Run a P&L for the last 12 months
Go to Reports→ “Profit and Loss.” Set the date range to the last 12 months (e.g., April 2025 to March 2026). Note Total Income.
2
Run a P&L for the prior 12 months
Change the date range to the 12 months before that (e.g., April 2024 to March 2025). Note Total Income.
3
Calculate the growth rate
(This year - Last year) / Last year x 100 = growth rate. Example: ($840,000 - $720,000) / $720,000 x 100 = 16.7%.
4
Check whether growth is accelerating or decelerating
Run monthly columns for the last 12 months. Compare each month to the same month last year. Are the year-over-year percentages getting bigger (accelerating) or smaller (decelerating)? A 16.7% annual rate that was 22% in Q1 and 8% in Q4 is decelerating.

Total time: about 10-15 minutes. Two P&L runs and one calculation. The month-over-month analysis adds another 10 minutes.

How to calculate your growth rate in Xero

1
Run the P&L with year-over-year comparison
Go to Accounting → Reports→ “Profit and Loss.” Set the range to the last 12 months and use “Compare with: Previous Year” to see both periods side by side.
2
Read the percentage change
Xero shows the dollar and percentage change between periods. The percentage change on Total Revenue is your annual growth rate.

Total time: about 5 minutes. Xero's built-in comparison feature makes this the fastest calculation of the bunch.

What counts as a healthy growth rate for a small business

0-5% growth: Essentially flat. You are keeping pace with inflation but not expanding. This can be fine for a lifestyle business but limits valuation.
5-15% growth: Healthy and sustainable for most small businesses. You are outpacing inflation and building capacity gradually.
15-30% growth: Strong growth. This level commands premium valuation multiples. Make sure margins are keeping pace.
30%+ growth: Aggressive growth. Watch cash flow closely. Rapid growth often creates cash crunches because expenses ramp up before revenue fully catches up.

Or see your growth rate calculated and contextualized automatically

Bottomline connects to your accounting software and calculates your growth rate every month, with context on whether growth is accelerating, healthy, or slowing:

Growth rate

16.7% year-over-year

Revenue (trailing 12mo)$842,400

Revenue (prior 12mo)$721,600

Q1 growth rate (annualized)22%

Q4 growth rate (annualized)11%

Growth is decelerating: 22% in Q1 vs. 11% in Q4. The annual number looks healthy but the trend is slowing. If Q4's rate continues, next year's growth will be closer to 11%.

From a real Bottomline report. Growth rate tracked with acceleration/deceleration context.

Bottomline does not just show you the headline number. It shows you whether growth is accelerating or decelerating, and whether it is profitable growth or just top-line expansion with flat margins.