data tool
CAGR calculator
The compound annual growth rate is the steady yearly rate that turns a start value into an end value: CAGR equals end divided by start, to the power of one over the years, minus one. Revenue that grew from 120,000 to 410,000 in 4 years grew at about 35.9% a year. This calculator gives the rate, the year by year path and a line to quote.
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How it works
- 1
Enter the two values
Type the start value and the end value, such as revenue in the first and last year.
- 2
Enter the years
Type the number of years between them, so 2022 to 2026 is 4 years.
- 3
Add yearly values if you have them
Paste one value per line to see how the simple average compares.
- 4
Copy the line
Read the CAGR, the multiple and the path, then copy the sentence for a slide or report.
The formula
CAGR is the end value divided by the start value, raised to the power of 1 divided by the number of years, minus 1. Doubling in 5 years is 2 to the power of 0.2, minus 1, which is 14.87% a year. Growing from 50,000 to 80,000 in 3 years is 1.6 to the power of one third, minus 1, which is 16.96%. The reverse works too: a start value times 1 plus the rate, to the power of the years, gives the end value, which is how the calculator fills its year by year table.
CAGR against average growth on a slide
Take values of 50,000, 100,000, 50,000 and 80,000 over three years. The yearly changes are plus 100%, minus 50% and plus 60%, which average 36.7%. But the business only went from 50,000 to 80,000, a CAGR of 17.0%. The simple average overstates growth whenever the yearly rates swing, because a 50% fall needs a 100% rise to recover. Investor education sites such as the SEC's Investor.gov and ASIC's Moneysmart explain the same compounding effect with their own calculators.
What CAGR hides
Because it uses only two points, CAGR hides the path between them. A company that grew fast and then stalled can show the same CAGR as one that grew steadily, and picking a weak start year flatters the rate. When quoting CAGR, say which years it covers, and where the path matters, show the yearly values beside it. The table under the calculator shows the smooth path the rate implies, which can be compared with the real figures.
Three rates worked through
From 120,000 to 410,000 in 4 years is a multiple of 3.42 and a CAGR of 35.96%, so the smooth path runs about 163,000, 222,000 and 301,000 in the years between. From 1.2 million to 1.5 million in 5 years is a multiple of 1.25 and a CAGR of 4.56%. From 80 down to 50 in 2 years is a CAGR of minus 20.94%, which is the steady fall that gives the same result. The table under the calculator prints each path to whole numbers.
Partial years
CAGR works with any length of time, not only whole years. From January 2023 to July 2026 is 3.5 years; type 3.5. Quarterly data can use quarters of a year, so 10 quarters is 2.5 years. The rate is still an annual rate. For very short periods, such as a few months, an annualised rate can look dramatic and should be quoted with care.
Putting it on a slide
A metrics slide in a pitch deck usually shows the start and end figures, the period and the CAGR in one line, such as grew from 120,000 to 410,000 between 2022 and 2026, a 35.9% compound annual growth rate. The copy button writes that sentence. The AI presentation generator builds a deck from a description; include the figures and the years so the slide states them exactly.
Limits
- The rate describes the smooth path between two points and says nothing about the years in between.
- The start value must be more than zero; growth from zero has no CAGR.
- A falling series gives a negative CAGR, which is shown as such.
- Years are typed directly; for dates, count the years between them first.
What it does not do
- It does not forecast future values.
- It does not adjust for inflation or currency.
- It does not store the figures.
Questions people ask
How do I calculate CAGR?
Divide the end value by the start value, raise the result to the power of 1 over the number of years, and subtract 1. From 100 to 200 over 5 years is 2 to the power of 0.2, minus 1, which is 0.1487, or 14.87% a year.
What is a good CAGR for a startup?
There is no single benchmark; it depends on stage, sector and market size. Early stage companies often show high rates from a small base, which shrink as the base grows. Compare against companies at the same stage, and always state the period the rate covers.
What is the difference between CAGR and average growth?
Average growth adds the yearly percentage changes and divides by the number of years. CAGR is the single steady rate that links the first and last values. When yearly rates vary, the simple average is higher than the CAGR and overstates what actually happened.
Can CAGR be negative?
Yes. If the end value is below the start value, the ratio is below 1 and the CAGR is negative, showing the steady yearly decline that would produce the same fall. An end value of zero gives minus 100%. The calculator shows it with a minus sign.
Why can't I use a start value of zero?
Because the formula divides by the start value. Growth from nothing has no meaningful compound rate, so for a new product, use the first full year of revenue as the start and say so on the slide. The calculator refuses a start of zero.
Is CAGR the same as an annual return?
For an investment with no money added or taken out, the CAGR of its value is its annualised return. When money is added or withdrawn along the way, CAGR of the balance mixes contributions with returns, and a money weighted or time weighted return is needed instead.
Put the rate on a slide
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Background reading: the question page on this.
Written and checked by the OneCraft team. Last checked .