Difference between revisions of "Calculate Cumulative Growth"
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Cumulative growth is a term used to describe a percentage of increase over a set period of time. Cumulative growth can be used to measure growth in the past and, thereby, to plan for population growth, estimate organic cell growth, measure sales growth, and so on. It is a useful descriptive tool in figuring out how growth has developed over time or how growth will continue to develop. Investors, marketers, and business planners need to know how to calculate cumulative growth, often expressed as CAGR (cumulative average growth rate), because it appears frequently in the financial sections of companies' annual reports.<ref name="rf1">https://www.business-case-analysis.com/growth-metrics.html</ref> The following article discusses several ways to go about finding and using CAGR. | Cumulative growth is a term used to describe a percentage of increase over a set period of time. Cumulative growth can be used to measure growth in the past and, thereby, to plan for population growth, estimate organic cell growth, measure sales growth, and so on. It is a useful descriptive tool in figuring out how growth has developed over time or how growth will continue to develop. Investors, marketers, and business planners need to know how to calculate cumulative growth, often expressed as CAGR (cumulative average growth rate), because it appears frequently in the financial sections of companies' annual reports.<ref name="rf1">https://www.business-case-analysis.com/growth-metrics.html</ref> The following article discusses several ways to go about finding and using CAGR. | ||
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== Steps == | == Steps == | ||
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#Analyze your result. When using your CAGR to predict future values, keep in mind that no historical data can accurately predict the future. However, using a CAGR can serve as a somewhat reliable estimate of future growth.<ref name="rf8">http://moneyterms.co.uk/cagr/</ref> Keep in mind also that this CAGR represents an average of the growth of the represented values and will likely be lower or higher within the given year or period of time that you are trying to estimate. | #Analyze your result. When using your CAGR to predict future values, keep in mind that no historical data can accurately predict the future. However, using a CAGR can serve as a somewhat reliable estimate of future growth.<ref name="rf8">http://moneyterms.co.uk/cagr/</ref> Keep in mind also that this CAGR represents an average of the growth of the represented values and will likely be lower or higher within the given year or period of time that you are trying to estimate. | ||
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== Tips == | == Tips == | ||
