CAGR Calculation - Example 2

Compound Annual Growth Rate
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CAGR Calculation - Example 2

If net profit for year 2000 is 200 million and for year 2004 is 400 million, then what will be the CAGR?


Calculate CAGR Example 2

(400/200)^(1/4) - 1 = (2)^(0,25) - 1 = 1,18 - 1 = 0,18


CAGR Example 2

OK, I agree with John

  Shafiqul Huq Shajal

CAGR Example 2b

If so the CAGR is 18% then what will be the expected sales for 2014. Is there any formula to forecast the future sales?

  Roel Villanueva
Accountant, Philippines

Formula to Forecast Future Sales Based on CAGR (Example 2b)

Using 2004 net profit of 400m as base, we can project the expected sales for 2014 as follows:
400 * (1+.189207)^10 = 2262.74m.

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