Fundamental Glossary / Growth Metrics
CAGR (Compound Annual Growth Rate)
The constant annual rate that carries a starting value to an ending value over several years.
Formula
(Ending value / starting value) ^ (1 / number of years) - 1.
What it means
CAGR smooths a jagged path into one rate. It says what steady compounding would have produced the same result. It does not say the business actually grew that much each year.
The number of years is the number of steps, not the number of data points. From March 2021 to March 2026 is five years.
How to read it
Use CAGR instead of adding annual percentages and dividing. An average of yearly rates is not the compound rate.
What to watch
CAGR is hostage to the start and end points. A depressed start inflates it. A peak end inflates it. Show the path, not only the single rate.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.