What is CAGR?

  • Finance

CAGR, or Compound Annual Growth Rate, is a financial metric that measures the average annual growth of an investment, revenue, or another value over a specific period. It represents steady, consistent growth, smoothing out short-term fluctuations to give a clearer picture of long-term performance. CAGR is commonly used to compare investment returns, business growth, or market trends, helping businesses and investors assess potential profitability. It does not account for market volatility but provides a reliable way to understand how an asset or business has grown over time.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.