Real Growth
Nominal growth with the price increase removed: how much more the same revenue can buy compared with the earlier period.
Real Growth and CashTerm 53 / 81
Formula
Real growth = (1 + Nominal growth) ÷ (1 + Inflation) − 1
In practice
The index you deflate with does not reflect your own price and cost structure. A business that raises prices much faster than CPI and one that can barely move prices get deflated by the same number. Treat real growth as a more honest first read than the nominal figure, not as a verdict.