CAGR

The steady annual growth rate that would take a business from its starting value to its ending value over a defined period, smoothing out year-to-year fluctuations into a single comparable growth figure.

CAGR is the standard metric for comparing growth across companies and periods because it removes the noise of individual years. A business that grew 80% one year and 10% the next has a very different story than its average suggests; CAGR captures the compounded trajectory.

A founder's business had revenue of £80,000 in year one and £250,000 in year four. Her CAGR over three years is 46%, calculated as (250,000 divided by 80,000) to the power of one-third, minus one. This single figure allows direct comparison against industry benchmarks and competitor growth rates.