CAGR = (End ÷ Start)^(1 ÷ Years) − 1. It is the steady yearly growth rate that would take the start value to the end value over that many years.
How it works
Years is the number of years between the two values, not the number of values: 2020 to 2025 is 5 years.
CAGR ignores the path in between. A business that grew, crashed and recovered can show the same CAGR as one that grew smoothly.
Averaging yearly growth rates overstates growth when they vary; CAGR is the honest single number.
Examples
100
200
5CAGR: 14.87% a year
Total growth: 100% over 5 yearsThese examples are run by the tool itself in our automated tests, so the results shown are what it really returns.
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