CAGR (Compound Annual Growth Rate)

Explanation: CAGR, or Compound Annual Growth Rate, is a measure used to represent the average annual growth rate of a particular metric over a specified period, assuming that growth has been compounded annually. It provides a smoothed rate of growth over time, accounting for fluctuations in the metric.

Example: For TCS, over the past 3 years, the Sales CAGR, Profit CAGR, Price CAGR, and CAPEX (Capital Expenditure) CAGR have been 12.83%, 9.23%, 11.4%, and 8.47%, respectively. This means that on average, TCS’s sales have grown at a rate of 12.83% per year, its profits have grown at a rate of 9.23% per year, its stock price has increased at a rate of 11.4% per year, and its capital expenditures have increased at a rate of 8.47% per year over the specified period.

CAGR is a useful metric for evaluating the trend and pace of growth in various aspects of a company’s operations or financial performance over time. It provides investors and analysts with a standardized measure to assess performance and make comparisons across different companies or time periods.

You can view the CAGR for 1 year, 3 years & 5 years for any company on Radar in the Performance section.