![]() ![]() Good revenue growth rate has to be above 15% year-over-year.Rapid growth indicates that demand for a company's products is strong and still growing.WHERE: n – number of periods and the ^ symbol is the exponent symbol that is used in math. Revenue growth rate, RGR (%) = (Revenue final – Revenue initial) / Revenue initial * 100Ĭompound annual growth rate, CAGR = * 100 flatten out returns when growth rates are expected to be volatile and inconsistent (it provides a "smoothed" rate of return).assess how well a particular stock performed against other stocks in a peer group and/ or against a market index.compare the two alternatives (companies, company’s investments). ![]() based on the past financial performance try to predict the future growth potential.assess the Revenue Growth Rate over time.Thus, using the CAGR or compound annual growth rate, we can: This metric is helpful in return-on-investment calculations, financial planning and budgeting. In case of three-year revenue growth rate calculation, you will need the Compound Annual Growth Rate (CAGR) of revenues over the last 3 years.Ĭompound Annual Growth Rate (CAGR) is a financial metric used for determining the smoothed annualized gain of an investment or business over a specific period. The expected revenue growth is based on its current growth rate. The great tool to estimate the expected growth of the company is to calculate anticipated revenue into the future. 3-Year Revenue Growth Rate Compound Annual Growth Rate (CAGR) and Revenue Per Share DEFINITION:
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