Metrics & KPIsCumulative Annual Growth Rate (CAGR)
Definition
This tells the story about any company as to at what rate the company has grown over years irrespective of consistency in growth YoY basis. A company might have one Sucessful year and then a bad year. If you compare the growth rate YoY basis it may give a different picture and be concluded as lack of consistency in management. But if one looks at the CAGR, it will explain the real growth over years.
Formula
It is calculated as : =Power(Revenue Year (n)/Revenue Year(1),1/n) - 1 Where, Revenue Year (n)= n-th year Revenue Revenue Year(1) = 1st year Revenue
Tags
growth