What does CAGR stand for?

The acronym CAGR stands for Compound Annual Growth Rate, which is a business term used in the analysis of a company's investment performance. The CAGR measures the annual average rate of increase, such as the value of a quantity, over a specified number of years.

The CAGR is often used by business firms as a reference for their annual return of investments. It is a method of smoothing out returns by assuming that investments increase at a constant rate which, in reality, fluctuate. The CAGR is computed using the formula CAGR = (ending value / starting value)^{1 / number of years} - 1.