Compound annual growth rate between two values, with the spreadsheet formula and the honest caveat about what it hides.
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CAGR = (ending / beginning) raised to the power of 1 divided by years, minus 1. It describes the smooth rate that would have produced the same result, which is why it is comparable across periods of different length.
Everything that happened in between. A business that tripled then halved and one that grew steadily can show the same CAGR. It is a comparison tool, not a description of the path, and quoting it without the underlying series is how volatility disappears from a deck.
No, and the difference is not small. Averaging yearly percentages overstates growth whenever the numbers vary, because a 50 percent gain followed by a 50 percent loss averages to zero but actually leaves you down 25 percent. CAGR compounds, so it tells the truth.
No. The maths requires a positive base, so a business starting from a loss has no meaningful CAGR. Any tool returning one there is producing a number without meaning.
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