Compound Annual Growth Rate (CAGR)

Compound Annual Growth Rate (CAGR) Calculator

Use our free Compound Annual Growth Rate (CAGR) calculator to evaluate the compound annualized rate of growth in a financial metric.


What is Compound Annual Growth Rate?

The compound annual growth rate (CAGR) is a measure of a company's average annual rate of growth for a financial metric. The CAGR is expressed as a percentage and accounts for the compounding effect by carrying over the financial gains and losses from year-to-year.

CAGR Calculator

Disclaimer: financial information is not financial advice – read our disclaimers.

CAGR Formula


CAGR = (End Year Value / Start Year Value) ^ (1 / Years) - 1


  • End Year Value = the end year financial metric value

  • Start Year Value = the start year financial metric value

  • Years = the number of years in the (start year, end year]

CAGR Calculation Example

As an example, a company reports $65 million in annual sales for 2020, whereas, 5 years ago in 2015, the company reported $40 million in annual sales.

Given the following:

  • End Month Value = $65 million

  • Start Month Value = $40 million

  • Periods = 5

We then plug the values into the formula to get the CAGR:

  • CAGR = (End Year Value / Start Year Value) ^ (1 / Periods) - 1

  • CAGR = ($65 Million / $40 Million) ^ (1 / 5) - 1 = 10.2%

The result of a 10.2% compound annual growth rate (CAGR) indicates that the company annual sales grew at a 10.2% compound annual growth rate every year from 2015 to 2020."

CAGR and Financial Analysis

The compound annual growth rate (CAGR) is a financial formula used by investors and traders to analyze the financial performance of a company's annual sales, earnings, etc.

By using the CAGR to analyze company financials, traders get a better picture of the overall financial health of a company. To mitigate risk, good traders buy shares in quality companies that are financially stable and growing.

A positive CAGR indicates a company's financial metric is growing, whereas a negative CAGR indicates the financial metric is declining.

Dream big, trade smart: empowering retail stock traders and investors.


Get weekly swing trade stock picks, published by The Swing.



Copyright © 2024 Stocksift LLC

Made with in St. Louis

Financial information is not financial advice, read our disclaimers.

Data from Nasdaq Data Link