Question**: A company’s revenue increased by 20% in the first year and by 25% in the second year. If the initial revenue was $200,000, what was the revenue at the end of the second year? - Databee Business Systems
How a 20% and 25% Annual Revenue Growth Transformed a Company’s Earnings: What the Numbers Reveal
How a 20% and 25% Annual Revenue Growth Transformed a Company’s Earnings: What the Numbers Reveal
In today’s competitive business landscape, strong revenue growth isn’t just a sign of success — it’s a promise of momentum and scalability. For many companies, year-over-year growth rates of 20% and 25% over two years reflect solid performance and growing market confidence. But how do these percentages translate into real financial impact? Let’s break down a compelling growth scenario to understand exactly how a company’s revenue evolves from a solid start.
Starting Strong: $200,000 Initial Revenue
Imagine a company launching with a strong foundation — $200,000 in initial revenue during year one. While this might seem modest, the strategic execution and market relevance set the stage for rapid growth.
Understanding the Context
Year One Attack: +20% Revenue Growth
A 20% increase means the business expands its base by an additional $40,000.
Revenue at End of Year One:
$200,000 × (1 + 0.20) = $240,000
This first growth demonstrates effective customer acquisition, pricing strategies, or operational efficiency — proving the company can scale sustainably.
Year Two Blaze Forward: +25% Growth
With a robust revenue of $240,000, the company pushes harder, achieving a 25% increase in year two.
Revenue at End of Year Two:
$240,000 × (1 + 0.25) = $300,000
The Total Impact After Two Years
From an initial $200,000 base, the cumulative growth resulted in:
Final Revenue: $300,000
That’s a 50% total increase over two years — a powerful example of how consistent and aggressive growth drives meaningful long-term results.
Key Insights
Why This Growth Matters
Such performance isn’t just good news for investors — it signals increasing valuation, stronger brand recognition, and greater competitive advantage. Businesses that sustain double-digit annual growth often pivot from startups to scale-ups, attracting further investment and talent.
Conclusion
A revenue trajectory from $200,000 growing by 20% then 25% illustrates a compelling narrative: solid beginnings, strategic scaling, and outstanding execution. Understand how these growth figures translate into real prosperity — essential knowledge for entrepreneurs, investors, and business analysts aiming to decode sustainable success in today’s economy.
Keywords: company revenue growth, annual revenue increase, financial growth calculations, business revenue success, 20% to 25% growth, doubling revenue strategies
Meta Description: Discover how a company’s revenue grew from $200,000 with 20% growth in year one and 25% in year two — calculate the final revenue and understand the impact of sequential growth.
