How To Calculate Revenue Cagr In Excel

There s no cagr function in excel.

How to calculate revenue cagr in excel. In one of our previous articles we unveiled the power of compound interest and how to calculate it in excel. The compound annual growth rate cagr shows the rate of return of an investment over a certain period of time expressed in annual percentage terms. The rri function has three arguments number of years 5 start 100 end 147. Compound annual growth rate cagr cagr stands for compound annual growth rate.

Using the irr function. In financial world cagr is commonly expressed in percentage. Cagr is the average rate of return for an investment over a period of time. In this tutorial you ll learn different ways to calculate the cagr in excel.

It is the rate of return required for an investment to grow from the starting balance to the ending balance assuming profits are reinvested each year and interest compounds annually. Cagr stands for compound annual growth rate. The answer is 8. The tutorial explains what the compound annual growth rate is and how to make a clear and easy to understand cagr formula in excel.

We will show you several methods below using different functions but first let s discuss what cagr is. If you re into and financial planning or analysis you must have heard about the compound annual growth rate or cagr. However simply use the rri function in excel to calculate the compound annual growth rate cagr of an investment over a period of years. To get the value in percentage and rounded off select the icon given inside the menu panel.

Below is an overview of how to calculate it. This tutorial will show you how to calculate cagr using excel formulas. The result in this case would be 12 22 as shown in the image below. The rri function below calculates the cagr of an investment.

That s it this is how you can calculate cagr or compound annual growth rate for an investment using excel. Skip ahead if you re already familiar with cagr. Cagr formula in excel is the function that is responsible for returning cagr value i e the compound annual growth rate value from the supplied set of values. If you are into financial analysis or planning you will need to calculate the compound annual growth rate in excel value in excel spreadsheets.

The compound annual growth rate is the year over year growth rate of an investment over a specified period of time. 1 divide the final year s revenue by the first year s revenue 2 raise that result to the power of the reciprocal of the number of years 3 subtract one from the result thus if you have 2000 s revenues as 1 000 and 2004 s as 1 800 in cells a1 and a2 respectively you use this formula a2 a1 1 4 1 which would equal 15 8 nuttinbutfun2.