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Compound Annual Growth Rate
 
what is Compound Annual Growth Rate? what are the uses to calculate this rate
 
The compound annual growth rate (CAGR) of a company refers to the growth rate of an investment, year after year, for a particular time period.
There are certain CAGR applications. Some of these are listed below for your reference:
  • Indicating and contrasting the investment advisors’ performance.
  • Calculating and communicating the average returns produced by the average returns of investment funds.
  • The CAGR is helpful in comparing the past returns of stocks with a savings account or even bonds.
  • The CAGR aids a company in forecasting future values based on the CAGR of a data series.
  • The compound annual growth rate is also useful in analyzing and communing the performance of distinctive business measures like sales, costs, market share, customer satisfaction, and performance, over a specified period of time.
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