CAGR vs. Simple Percentage Change: Key Difference When analyzing growth, it's important to choose the right metric. Here's a quick breakdown: Simple Percentage Change - Measures the total growth between two points. - Useful for short-term comparisons but doesn't consider time or compounding. - Example: If revenue grows from ₹1,000 to ₹1,500 in 3 years, the growth is 50%. CAGR (Compound Annual Growth Rate) - Shows the annualized growth rate assuming compounding. - Ideal for long-term analysis. - Example: For the same growth, the CAGR is 14.47% per year. Key Takeaway: Use simple percentage change for short-term insights and CAGR for a clearer picture of consistent growth over time.
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