CAGR - Revision history

imported>Doug Williamson: Mend link.

2019-02-24T13:13:02Z

Mend link.

← Older revision		Revision as of 13:13, 24 February 2019
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	== See also ==		== See also ==
	* [[Compound ~~annual growth rate~~]]		* [[Compound Annual Growth Rate]]
	* [[Compound interest]]		* [[Compound interest]]
	* [[Extrapolation]]		* [[Extrapolation]]

imported>Doug Williamson: Remove material transferred to Compound annual growth rate page.

2019-02-24T13:12:38Z

Remove material transferred to Compound annual growth rate page.

@@ Line 1: / Line 1: @@
 Compound Annual Growth Rate.
 == See also ==
 * [[Compound interest]]
 * [[Extrapolation]]
 * [[Geometric mean]]

imported>Doug Williamson: Improve calculations.

2016-01-15T19:24:08Z

Improve calculations.

← Older revision		Revision as of 19:24, 15 January 2016
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	The compound annual growth rate is calculated from total growth over a longer period as:		The compound annual growth rate is calculated from total growth over a longer period as:

	CAGR = ( End amount / Starting amount )<sup>(1/n)</sup> - 1		CAGR = (End amount / Starting amount)<sup>(1/n)</sup> - 1

	''Where:''		''Where:''
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	The CAGR is:		The CAGR is:

	= ( 150 / 100 )<sup>(1/2)</sup> - 1		= (150 / 100)<sup>(1/2)</sup> - 1

	= 1.50<sup>(1/2)</sup> - 1		= 1.5<sup>(1/2)</sup> - 1

	= 22.5%.		= 22.5%.
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	The CAGR caclulated from this data is:		The CAGR caclulated from this data is:

	= ( 115 / 100 )<sup>(1/0.25)</sup> - 1		= (115 / 100)<sup>(1/0.25)</sup> - 1

	= 1.15<sup>4</sup> - 1		= 1.15<sup>4</sup> - 1

imported>Doug Williamson: Link with Geometric mean page.

2015-12-01T08:32:25Z

Link with Geometric mean page.

← Older revision		Revision as of 08:32, 1 December 2015
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	* [[YOY]]		* [[YOY]]
	* [[Extrapolation]]		* [[Extrapolation]]
			* [[Geometric mean]]

imported>Doug Williamson: Add titles to Examples.

2015-12-01T08:31:48Z

Add titles to Examples.

← Older revision		Revision as of 08:31, 1 December 2015
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	<span style="color:#4B0082">~~'''~~Example 1~~'''~~</span>		===<span style="color:#4B0082">Example 1: Sales growth over two years</span>===

	Sales have grown from $100m to $150m over the most recent 2-year period.		Sales have grown from $100m to $150m over the most recent 2-year period.
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	<span style="color:#4B0082">~~'''~~Example 2~~'''~~</span>		===<span style="color:#4B0082">Example 2: Sales growth over three months</span>===

	The same formula can be used to calculate a compound annual growth rate, based on a ''shorter'' sampling period.		The same formula can be used to calculate a compound annual growth rate, based on a ''shorter'' sampling period.

imported>Doug Williamson: Expand calculations.

2015-11-14T19:19:52Z

Expand calculations.

← Older revision		Revision as of 19:19, 14 November 2015
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	= ( 150 / 100 )<sup>(1/2)</sup> - 1		= ( 150 / 100 )<sup>(1/2)</sup> - 1

			= 1.50<sup>(1/2)</sup> - 1

	= 22.5%.		= 22.5%.
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	= ( 115 / 100 )<sup>(1/0.25)</sup> - 1		= ( 115 / 100 )<sup>(1/0.25)</sup> - 1

	= ~~( 115 / 100 )~~<sup>4</sup> - 1		= 1.15<sup>4</sup> - 1

	= 74.9%.		= 74.9%.

imported>Doug Williamson: Add a line to the calculation.

2015-11-14T19:17:46Z

Add a line to the calculation.

← Older revision		Revision as of 19:17, 14 November 2015
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	The CAGR caclulated from this data is:		The CAGR caclulated from this data is:

	= ( 115 / 100 )<sup>(1/0.25 = 4)</sup> - 1		= ( 115 / 100 )<sup>(1/0.25)</sup> - 1

			= ( 115 / 100 )<sup>4</sup> - 1

	= 74.9%.		= 74.9%.

imported>Doug Williamson: Note expressly that the 2-year period is historical.

2015-11-14T19:15:14Z

Note expressly that the 2-year period is historical.

← Older revision		Revision as of 19:15, 14 November 2015
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	During this particular 2-year period, sales were growing at an average rate of 22.5% per annum.		During this particular 2-year historical period, sales were growing at an average rate of 22.5% per annum.

	However, this is not evidence about any other periods, particularly not future periods.		However, this is not evidence about any other periods, particularly not future periods.

imported>Doug Williamson: Expand the page and extend examples and interpretation.

2015-11-14T07:33:09Z

Expand the page and extend examples and interpretation.

← Older revision		Revision as of 07:33, 14 November 2015
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	~~Calculated~~ from total growth over a ~~multiple years~~ period as:		The compound annual growth rate is calculated from total growth over a longer period as:

	CAGR = ( ( End amount ) / ( Starting amount ) )<sup>(1/n)</sup> - 1		CAGR = ( End amount / Starting amount )<sup>(1/n)</sup> - 1

	Where ~~n = number of years.~~		''Where:''

			n = number of years between the two points sampled

	~~'''Example'''~~

	~~Sales grow from $100m to $150m over a two-year period.~~		<span style="color:#4B0082">'''Example 1'''</span>

	CAGR is:		Sales have grown from $100m to $150m over the most recent 2-year period.

			The CAGR is:

	= ( 150 / 100 )<sup>(1/2)</sup> - 1		= ( 150 / 100 )<sup>(1/2)</sup> - 1

	= 22.5%.		= 22.5%.


			During this particular 2-year period, sales were growing at an average rate of 22.5% per annum.

			However, this is not evidence about any other periods, particularly not future periods.


			<span style="color:#4B0082">'''Example 2'''</span>

			The same formula can be used to calculate a compound annual growth rate, based on a ''shorter'' sampling period.

			Sales grew from $100m to $115m over a historical period of 3 months (= 0.25 years).

			The CAGR caclulated from this data is:

			= ( 115 / 100 )<sup>(1/0.25 = 4)</sup> - 1

			= 74.9%.


			During this particular 3-month period, sales grew at a rate of 74.9% per annum.

			On its own, this is NOT evidence that sales will continue to grow at this rate during the remaining 9 months of the year, nor indeed in any other period.

			Proper use of this kind of analysis will investigate the ''reasons'' for the figures, and then respond appropriately.



	== See also ==		== See also ==
	* [[Compound interest]]		* [[Compound interest]]
			* [[YOY]]
			* [[Extrapolation]]

imported>Doug Williamson: Standardise appearance of page

2015-03-18T17:03:24Z

Standardise appearance of page

@@ Line 1: / Line 1: @@
 Compound Annual Growth Rate.
-For example, sales grow from $100m to $150m over a two-year period.
+Calculated from total growth over a multiple years period as:
 CAGR = (150/100)<sup>(1/2)</sup> - 1 = 22.5%.
 == See also ==
 * [[Compound interest]]