CAGR is short for Compound Annual Growth Rate. With the verb “to compound” meaning “to multiply”. Growth on top of growth.
What if a company currently has $100 million dollar in sales, and wants to be at $249 million five years from now. What growth rate would get you from A to B?
The answer is 20%, and the formula to calculate this CAGR consists of three steps:
ending point (in our case $249 in cell B7) divided by starting point (in our case $100 in cell B2),
to the power 1 divided by n (in our case 1-2-3-4-5, as we have a 5-year growth plan),
and all of that minus 1 in order to convert to a percentage.

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