Is there a way to show negative growth in a more intuitive way than the normal (straight line) growth rate formula?
Say Company C earn $100 last year, this year it earns -$200, then next year it earns further -$300.
with Growth Rate = [(Present Value - Past Value)/Past Value]x100
we get growth from last year as = [(-200 - 100)/100] x 100 = -300%.
then next year, we get growth = [(-300 - -200)/-200] x 100 = [(-300 + 200)/-200] x 100
= (-100/-200)x100 = positive 50%
So if we look at the positive 50% growth next year, it really is a further decline in earnings, but mathematically it's a gain - just a further gain on a loss.
So on a chart it could be misleading.
I think the maths above is right, just we need to take into consideration the previous year's figure to have some context on the growth figure - that it could be a growth on a loss. i.e. further losses.
Is there a way to show the above more intuitively?