- published: 21 Jun 2015
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Compound annual growth rate (CAGR) is a business and investing specific term for the geometric progression ratio that provides a constant rate of return over the time period. CAGR is not an accounting term, but it is often used to describe some element of the business, for example revenue, units delivered, registered users, etc. CAGR dampens the effect of volatility of periodic returns that can render arithmetic means irrelevant. It is particularly useful to compare growth rates from different data sets such as revenue growth of companies in the same industry.
In this example, we will compute the CAGR over three periods. Presume that the year-end revenues of a business for four years, V(t) in above formula, have been:
Therefore, to calculate the CAGR of the revenues over the three-year period spanning the "end" of 2004 to the "end" of 2007 is:
The CAGR or the compounded annualized growth rate of an investment in a volatile instrument such as stocks or equity mutual fund is explained. A detailed explanation can be found here http://freefincal.com/understanding-the-nature-of-stock-market-returns/
The compound annual growth rate is a business and investing specific term for the smoothed annualised gain of an investment over a given time period. CAGR is not an accounting term, but remains widely used, particularly in growth industries or to compare the growth rates of two investments. CAGR is often used to describe the growth over a period of time of some element of the business, for example revenue and units delivered. Reference: http://en.wikipedia.org/wiki/Compound_annual_growth_rate - created at http://goanimate.com/
How to calculate compounded annual growth rate (CAGR) with a formula and also create your own custom function in Excel. ------------------------------------------------------------------------------------------------- Subscribe to the Blog: http://myexcelcharts.blogspot.com
Differences and similarities between the two types of annualized returns: the Compound Annual Growth Rate (CAGR) and the extended internal rate of return (XIRR)
Compound annual growth rate (CAGR) is a business and investing specific term for the geometric progression ratio that provides a constant rate of return over the time period. CAGR is not an accounting term, but it is often used to describe some element of the business, for example revenue, units delivered, registered users, etc. CAGR dampens the effect of volatility of periodic returns that can render arithmetic means irrelevant. It is particularly useful to compare growth rates from different data sets such as revenue growth of companies in the same industry. This video is targeted to blind users. Attribution: Article text available under CC-BY-SA Creative Commons image source in video
A video tutorial on How To Determine Cagr that will improve your math, business accounting skills. Learn how to get good at math, business accounting from Videojug's hand-picked professionals. Subscribe! http://www.youtube.com/subscription_center?add_user=videojugeducation Check Out Our Channel Page: http://www.youtube.com/user/videojugeducation Like Us On Facebook! https://www.facebook.com/videojug Follow Us On Twitter! http://www.twitter.com/videojug Watch This and Other Related films here: http://www.videojug.com/film/how-to-calculate-cagr
This video is about how to calculate CAGR or Growth Rate for your investments or schemes like LIC Jeevan Anand. Everyone knows what the interest rate is for Bank FD's, and PPF to name a few investment products. Bank FD offers around 9% and PPF offers 8.7%. Given the interest rate, how to calculate the final maturity amount of an investment? But, the investment cum insurance schemes offered by LIC do not advertise any interest rate that you can expect from their schemes. Because, obviously, it is not going to be fixed; rather dependent on the actual bonus rates declared by LIC every year. As an investor, you must normalize expected returns offered by any investment scheme into a single number and compare it with other products. That number is called "CAGR". CAGR is the Cumulative/Compound...
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