How do you interpret the gradient of a sales graph?

The gradient of a sales graph shows the rate of change in sales over time.

When you look at a sales graph, the gradient (or slope) tells you how quickly sales are increasing or decreasing. If the gradient is positive, it means sales are going up; if it's negative, sales are going down. A steeper gradient indicates a faster rate of change, while a flatter gradient suggests a slower rate of change.

To find the gradient, you need to look at two points on the graph. Let's say you have points (x₁, y₁) and (x₂, y₂), where x represents time and y represents sales. The gradient is calculated using the formula: (y₂ - y₁) / (x₂ - x₁). This formula gives you the change in sales (y) divided by the change in time (x).

For example, if sales increased from 100 units to 200 units over 5 months, the gradient would be (200 - 100) / (5 - 0) = 100 / 5 = 20 units per month. This means sales are increasing by 20 units each month.

Understanding the gradient helps businesses make informed decisions. If the gradient is positive and steep, it might be a good time to invest more in marketing. If the gradient is negative, the business might need to investigate why sales are dropping and take corrective action.

In summary, the gradient of a sales graph is a powerful tool for analysing how sales are changing over time, helping businesses to strategise effectively.