CAGR Explained
CAGR summarizes multi-year growth as a constant annualized rate.
Why it helps
It makes growth across periods easier to compare.
What it hides
CAGR smooths the path and does not show volatility between the starting and ending years.
Best use
Use CAGR for high-level comparison, then inspect year-by-year results separately.
Practical takeaway
Use the metric that matches the business question you are trying to answer. When several metrics describe different stages of the same workflow, compare them together rather than optimizing one in isolation.
Advertisement placeholder