CAGR Calculator

Turn growth between two points in time into one steady yearly rate you can compare across metrics and companies.

How to use

What it checks and how it works

CAGR = (ending value / beginning value) ^ (1 / years) - 1, the formula the Corporate Finance Institute gives. When you enter dates, the span is converted to years at 365.25 days per year. CAGR is a smoothed rate. It ignores the path between the two ends, so a bumpy history and a steady one can share the same CAGR, and it says nothing about volatility. It is undefined for a zero or negative beginning or ending value, because the formula takes a root of the ratio. Over a period shorter than a year it annualises a short stretch and exaggerates any jump, so the tool warns and suggests comparing the plain change instead.

When is CAGR the wrong measure?

When the values swing from year to year, when the beginning or ending value is zero or negative, or when the period is very short. In those cases show the actual values by year.

How is CAGR different from average growth?

An average of yearly growth rates ignores compounding and can overstate what happened. CAGR is the single rate that would take the beginning value to the ending value over the same period.

Can I use it for traffic or revenue?

Yes, for any positive quantity measured at two points, such as sessions, revenue or customers. Use the same definition at both ends.

Sources

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