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Excel CAGR Formula

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=(EndValue/StartValue)^(1/Periods)-1

Quick context

  • • Works in both Excel and Google Sheets.
  • • Use when you need consistent, auditable results.
  • • Copy the snippet above and adjust only the ranges.

When to use

Learn how to use the Excel CAGR Formula formula.

Why you need this

Calculating Compound Annual Growth Rate (CAGR) is the standard for smoothing out volatility in revenue or investment returns over time. It answers the question: 'If this grew at a steady rate, what would that rate be?'

Syntax Breakdown

  • EndValue: The final value in your series.
  • StartValue: The initial value.
  • Periods: The number of years (or periods) between start and end.

Note: Excel has an RRI function, but most analysts prefer this manual power formula for transparency.

Disclaimer: While we strive for accuracy, these formulas are provided "as is" without warranty of any kind. Please verify all results before use.

Common Mistakes

  • ✕ Confusing the number of periods. The exponent (1/Periods) requires the number of growth intervals (Years - 1), not the total count of data points. If you have 5 years of data, the period count is 4.

Best Practices

  • ✓ Use RRI function. Modern Excel has the RRI function which calculates CAGR automatically without manual math.

Manual Risk Detected

Manual CAGR calculation is error-prone. One wrong cell reference ruins the board deck. View FP&A Tools.

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