CAGR
Business & Finance abbreviation · Finance
| Stands for | Compound annual growth rate |
|---|---|
| Categories | Business & Finance |
CAGR stands for Compound annual growth rate, a finance abbreviation.
Constant yearly growth rate that would take a value from its starting level to its ending level over a given number of years, smoothing out year-to-year swings. It equals the ending value divided by the beginning value, raised to the power of one over the number of years, minus one.
Example: Revenue grew from $50 million to $80 million over five years, a CAGR of about 9.9 percent.
Usage notes
Pronounced "kag-er." CAGR is popular in investor presentations and market-research reports because it summarizes growth in a single number, but it hides volatility and is sensitive to the choice of start and end years. For an investment with no interim cash flows, it equals the annualized return.
Related abbreviations
More finance abbreviations
- ABL – Asset-based lending
- APA – Asset purchase agreement
- APV – Adjusted present value
- ARR – Annual recurring revenue
- ATM – At-the-market offering
- AUM – Assets under management
- CapEx – Capital expenditure
- CAPM – Capital asset pricing model
- CCC – Cash conversion cycle
- CIM – Confidential information memorandum
- CVC – Corporate venture capital
- D/E – Debt-to-equity ratio