 # How to Calculate CAGR if there is a Loss in the First Year? Compound Annual Growth RateKnowledge Center Next Topic   Waleed, Manager
🔥NEW How 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... (...) Read more? Sign up for free Please register now to read all responses and to join this discussion yourself. It's easy and 100% free. Anonymous Calculating CAGR if there is a Loss in the First Year You 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.

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 CAGR Calculation - Example 1 Compound Annual Growth Rate: CAGR Formula How to Calculate CAGR if there is a Loss in the First Year?
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