GEOMEAN Function in Excel: Average Growth Rate

GEOMEAN Function in Excel: Average Growth Rate featured illustration

📎 This article includes 1 downloadable practice file ↓

⏱ 2 min readUpdated 5 October 2026

StatisticsLevel: ExpertAvailable in: Excel 2007+

In this article
  1. Syntax
  2. Examples
  3. Example 1
  4. Common errors and fixes
  5. GEOMEAN in practice
  6. Where you will use it
  7. Worked example
  8. Mistakes people make
  9. Related functions
  10. Continue learning

GEOMEAN multiplies values and takes the n-th root. For growth rates it gives the honest average: +50% followed by −50% is not an average of 0%, you lost a quarter.

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Syntax

=GEOMEAN(number1, [number2], ...)
Argument What it means
number1… Positive numbers only.

Examples

Example 1

=GEOMEAN(1+B2:B6)-1

Average annual return from five yearly returns in B2:B6.

Common errors and fixes

You see Why, and the fix
#NUM! A zero or negative value — add 1 to percentage returns first.

GEOMEAN in practice

Where you will use it

  • Average yearly growth rate
  • Average of ratios
  • Average return over years

Worked example

Growth factorsFormulaResult
1.10, 1.20, 0.90=ROUND(GEOMEAN(CHOOSE(ROW()-1,{1.1,1.2,0.9},{1.05,1.05,1.05},{2,0.5})),4)1.0591
1.05, 1.05, 1.05=ROUND(GEOMEAN(CHOOSE(ROW()-1,{1.1,1.2,0.9},{1.05,1.05,1.05},{2,0.5})),4)1.05
2, 0.5=ROUND(GEOMEAN(CHOOSE(ROW()-1,{1.1,1.2,0.9},{1.05,1.05,1.05},{2,0.5})),4)1

Results calculated in Excel.

Mistakes people make

MistakeWhat to do instead
Using AVERAGE for growthArithmetic mean overstates compound growth
Zero or negative values#NUM!; use growth factors (1+r)

RRI · AVERAGE

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📎 Practice files for this article

  • 📗
    Practice workbook: Statistics advanced33 tasks on realistic sales data — type your formula, the Check column turns green when it is right. Answers sheet included.
    ⬇ XLSX · 36 KB

Free to use for learning. Files with macros (.bas) are plain text — import them with Alt+F11 → File → Import File, and always test on a copy.

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