Graduation rates is the percentage of students who graduate from an educational institution. The general formula for graduation rate is the number of students graduating divided by the number of students. Graduation rates are important because it shows how committed schools are to graduating their students. Schools with high graduation rates have less students who fail in school and more students earning a degree.

1Determine the number

Determine the number of students who are graduating. For example, a school has 2,000 graduates.

2Determine the number of students who entered the school as freshmen

Determine the number of students who entered the school as freshmen, then add students who transferred to the school and subtract students who transferred out of the school. In our example, the freshmen class which is graduating started with 2,050 students, had 11 students transfer in and 12 students transfer out. Therefore, there were 2049 students in the graduating class.

3Divide the number

Divide the number of students graduating by the number of students in the graduating class. In the example, 2,000 students divided by 2049 students equals 0.976 or 97.6 percent.

Carter McBride started writing in 2007 with CMBA's IP section. He has written for Bureau of National Affairs, Inc and various websites. He received a CALI Award for The Actual Impact of MasterCard's Initial Public Offering in 2008. McBride is an attorney with a Juris Doctor from Case Western Reserve University and a Master of Science in accounting from the University of Connecticut.