The compound annual growth rate (CAGR) is a measure used to calculate the mean annual growth rate of an investment or business over a specified time period, assuming the investment grows at a steady rate. It reflects the average rate at which an investment would have grown if it had experienced consistent growth, rather than volatile fluctuations. CAGR is widely used in financial performance metrics as it provides a more accurate picture of growth trends over time, making it easier to compare different investments or business performance.
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