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CAGR & Year-over-Year Growth Rate Calculator

Calculate Compound Annual Growth Rate (CAGR) and Year-over-Year (YoY) metrics for revenue, investments, or user growth.

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Category Financial Ratios
Period / Year Value ($)
CAGR -
Total Growth % -
Abs. Change -
Period Value YoY Growth
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About

The Compound Annual Growth Rate (CAGR) is the geometric progression ratio that provides a constant rate of return over a specific time period. Unlike an average growth rate, which can be skewed by volatility (e.g., +100% one year, -50% the next), CAGR smoothes the curve to show what the growth would have been if it had been steady.

This tool is essential for analyzing financial performance where intermediate values fluctuate. It computes the Year-over-Year (YoY) growth for each interval to highlight trends (accelerating or decelerating growth) and solves the overarching CAGR. Note: CAGR logic requires the starting value to be non-zero and non-negative for a meaningful real-number result.

CAGR growth rate YoY financial modeling percentage change

Formulas

The standard CAGR formula used is:

CAGR = ( VfinalVinitial )1t − 1

Where t is the time period in years.

Reference Data

MetricFormulaUse Case
CAGREndStart1/n − 1Long-term trend analysis
YoY GrowthYear2 − Year1Year1Annual performance review
Abs. GrowthEnd − StartTotal value creation

Frequently Asked Questions

CAGR cannot be calculated mathematically if the Starting Value is 0 or negative. You cannot grow from zero to a number via multiplication, and roots of negative numbers are imaginary.
Average Growth takes the arithmetic mean of all YoY percentages. CAGR is a geometric mean. If an investment falls 50% then grows 50%, Average Growth is 0%, but you have actually lost money. CAGR correctly shows the negative return.