Revenue Growth Cagr Formula

For example let s derive the compound annual growth rate of a company s sales over 10 years.

Revenue growth cagr formula. The cagr or compound annual growth rate is the average rate at which an investment grows over time assuming that it was compounded re invested annually periodically. Compound annual growth rate cagr is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance assuming the profits were reinvested at. The cagr between given years x and z where z x n is the number of years between the two given years is calculated as follows. The cagr formula is a way of calculating the annual percentage yield apy 1 r n 1 where r is the rate per period and n is the number of compound periods per year.

For an investment the period may be shorter or longer than a year so n is calculated as 1 years or 365 days depending on whether you want to specify the period in years or days. A more complex situation arises when the measurement period. The cagr of sales for the decade is 5 43.