You're here:  Home --> Dictionary --> C --> CAGR

Growth Rate
ROI
WACC
Horizontal Analysis

CAGR
Term category: Finance/Accounting
In 10 words or less: The compounding rate of return over a period.

Definition: The compound annual growth rate (CAGR) is the rate at which an investment grows annually to reach a given end value.  It's calculated by the following:

CAGR =

StockJargon Advice: CAGR is a great way to figure out the rate of return given only a couple details.  For example, if I said I invested $1000 in 1990 and had $1700 in 2005, I can use this equation to figure out that that is a 3.6% CAGR.

CAGR's are commonly used in financial statement analysis.

Related Articles

Compounding (The Eighth Wonder of the World)
Compounding is the invisible force responsible for making people billions of dollars

CAGR Explained
In case our definition didn't explain it enough, this page does a good job.

A Foolish Math Primer
The Motley Fool brings you this primer on investment math, including CAGR...

Related Books

The Five Rules for Successful Stock Investing by Pat Dorsey
Reminiscences of a Stock Operator By Edwin Lefevre
The Intelligent Investor by Benjamin Graham
Beating the Street by Peter Lynch

# -A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z