Finance

Find average yearly growth (CAGR)

How it works in Excel

• B2/B1 shows how many times the value grew.
• ^(1/B3) spreads that growth over the years.
• -1 turns it into a growth rate.
• Format the cell as a percentage.
• B3 is the number of years between the two values, not the number of data points.
• It smooths out ups and downs, so it hides how bumpy the path was.

The idea in general

It answers: "If this had grown at one steady rate each year, what would that rate be?"

What I assumed

• The starting value is in B1, the ending value is in B2 and the years are in B3.

Check the result on your own data before relying on it.