Can CAGR be negative?

Yes. If the ending value is below the beginning, CAGR is negative and represents the steady yearly loss.

How is CAGR different from average return?

Arithmetic averages ignore sequencing; CAGR reflects actual compounding. A −50% year followed by +50% averages to 0% arithmetically but loses 25% in reality; which CAGR captures.

Can I use it for shrinking metrics like churn?

It computes fine for any positive values; a negative CAGR on costs is good news.

Finance

CAGR Calculator

What this does

Find the compound annual growth rate between two values over any number of years.

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Good to know

Why analysts live in CAGR

Revenue comparisons, fund marketing and business cases all quote CAGR because it removes calendar distortion: “we grew 300% in six years” sounds heroic until CAGR reveals it as ~26%/year against competitors doing 35%.

What CAGR conceals

Two investments with the same endpoints can have radically different risk. CAGR says nothing about drawdowns along the way; pair it with volatility measures before judging quality.

How it's calculated

The math behind this calculator

CAGR = (End / Begin)^(1/years) − 1

CAGR answers: “what steady yearly rate would carry the beginning value to the ending value?” It smooths volatile journeys into one comparable figure; a portfolio that swung +40%, −20%, +15% still has a single CAGR over the span.

Assumptions & limitations

Growth is measured between two points in time only.
Intermediate volatility is deliberately hidden.
No cash flows in or out during the period.

Worked example

Growing from $8,000 to $14,000 over four years is a 75% total gain; a CAGR of 15.02% per year.

FAQ

Frequently asked questions

Can CAGR be negative?: Yes. If the ending value is below the beginning, CAGR is negative and represents the steady yearly loss.
How is CAGR different from average return?: Arithmetic averages ignore sequencing; CAGR reflects actual compounding. A −50% year followed by +50% averages to 0% arithmetically but loses 25% in reality; which CAGR captures.
Can I use it for shrinking metrics like churn?: It computes fine for any positive values; a negative CAGR on costs is good news.

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