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I have sales by 30 different products over years (2015-2022). I need to compute Compound Annual Growth Rate, however some of the product groups have high CAGR and some of them have quite low CAGR. So there is high variance.

In order to get a better overall picture, I am thinking about calculating the average of each product's CAGR. Do you think this is a good idea? Or what would you offer? Like:

  • Average Anual Growth Rate
  • Geometric mean of CAGRs
  • or....?
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If you want the CAGR of the company as a whole, then you could tage the average CAGR weighted by sales volume (or more precisely, calculate the total sales of the company for the start and end period and calculate the CAGR of that).

Or, use a simple average to see how an "average" product performs regardless of volume.

Geometric average makes no sense because growth rates do not compound across products. A geometric average is meant to calculate an average compounded rate of growth.

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  • What is the formula of the average CAGR weighted by sales volume?
    – Underwood
    Commented Aug 31, 2022 at 7:13
  • Multiply the CAGR of each product by its revenue, add them up, and divide by the total revenue.
    – D Stanley
    Commented Aug 31, 2022 at 13:27

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