Definition The steady yearly growth rate that would take a value from its starting point to its end point over several years.
Also called CAGR, Compound annual growth rate
Example Revenue growing from €1m to €1.21m over 2 years is a CAGR of 10%.
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Why it matters It gives a fair view of growth over several uneven years.
Where it is used Investor presentations, market reports and strategy plans.
How to calculate it (Revenue in final year ÷ revenue in first year)^(1 ÷ number of years) − 1
Worked example Revenue growing from €1m to €1.21m over 2 years is a CAGR of 10%.
