 How to Calculate CAGR if there is a Loss in the First Year? Compound Annual Growth RateKnowledge Center Next Topic Compound Annual Growth Rate > Forum > How to Calculate CAGR if there is a Loss in the First Year?  How to Calculate CAGR if there is a Loss in the First Year?Waleed, Manager, MemberHow to calculate CAGR in the following case: Profit in year 2018: 1200 Profit in year 2017: 1400 Profit in year 2006: - 500. Thanks for your suggestions... Calculating CAGR if there is a Loss in the First Year AnonymousYou can’t calculate that. Why not? Let’s look at the formula for calculating CAGR: CAGR = (ending amount / beginning amount)(1 / # of years) – 1 Mathematically, because you’re taking a root of a number, if you have a negative beginning amount and a positive ending amount, you’d be taking the root of a negative number. Unless you have an odd # of years, you can’t compute this mathematically without going into imaginary numbers The best way to deal with situations where you have a negative initial value is to just footnote it and calculate CAGR based on the first positive initial value you have. So, in your example, you had a project that lost 500 in year 2016, then gained 1400 in year 2017, and ended in year 2018 with 1200, you might write the following: Revenues went down from 1400 to 1200 during the period 2017-2018 (CAGR of -14.29%). Note that this excludes the initial 2016 year, when the project lost 500. Your first visit to 12manage? 12manage is the global knowledge sharing platform about management for managers, consultants, teachers, academics and students. To use certain functions of 12manage, a (free) registration is required. Would you like to develop yourself in management? Sign up for free Special Interest Group Leader Compound Annual Growth Rate   Compound Annual Growth RateKnowledge Center Next Topic 