CAGR Calculator
Calculate your Compound Annual Growth Rate (CAGR) and visualize growth trajectory over time.
Compound Annual Growth Rate (CAGR)
35.7%
Mean annual growth rate over time, assuming steady growth
CAGR Calculator
The Compound Annual Growth Rate (CAGR) calculator helps you measure and understand the mean annual growth rate of an investment or business metric over time, assuming steady growth.
How It Works
- Enter your starting value (e.g., revenue, MRR, customer count)
- Enter your ending value after the growth period
- Specify the time period in years
- The calculator will show your CAGR and plot the growth trajectory
Understanding the Results
The CAGR represents the geometric progression ratio that provides a constant rate of return over the time period. It's calculated using the formula:
CAGR = (End Value / Start Value)^(1/years) - 1
For example, if your MRR grew from $10,000 to $25,000 over 3 years:
CAGR = ($25,000 / $10,000)^(1/3) - 1
= 35.72%
Common Use Cases
- Revenue Growth Analysis: Track your revenue growth rate over multiple years
- Customer Base Growth: Analyze your customer acquisition rate
- Market Comparison: Compare your growth rate to industry benchmarks
- Valuation Metrics: Use CAGR for company valuation calculations
Limitations
- CAGR assumes steady growth over the period
- It doesn't show interim volatility or fluctuations
- It doesn't show seasonal effects
- The metric smooths out peaks and valleys in growth
- Past CAGR doesn't guarantee future growth rates
Tips for Improvement
-
Early-stage Companies
- Focus on product-market fit before scaling
- Invest in customer acquisition channels
- Monitor customer satisfaction and retention
-
Growth-stage Companies
- Optimize unit economics
- Expand into new markets or segments
- Develop upsell/cross-sell strategies
-
Mature Companies
- Focus on customer retention
- Explore adjacent markets
- Invest in product innovation