Market Growth Rate Calculator (CAGR)
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}
Calculate Growth
Clear
Compound Annual Growth Rate (CAGR)
0.00%
Total Percentage Growth
0.00%
Absolute Market Growth
$0.00
Trend Analysis
—
Understanding Market Growth Rate
The Market Growth Rate is a crucial metric for investors, business owners, and analysts. It measures the increase in the size of a market segment, revenue, or user base over a specific period. While a simple percentage growth calculation shows the total change, the Compound Annual Growth Rate (CAGR) is the industry standard for smoothing out volatility and determining the steady annual growth rate needed to grow from the beginning balance to the ending balance.
Why Use CAGR?
Unlike average annual growth, which can be skewed by volatile years, CAGR provides a geometric progression ratio that provides a constant rate of return over the time period. It answers the question: "If the market grew at a steady rate every year, what would that rate be?"
The Formulas Used
This calculator utilizes two primary formulas to assess market health:
1. Compound Annual Growth Rate (CAGR)
The formula for CAGR is:
CAGR = (Ending Value / Beginning Value)(1 / n) – 1
Ending Value: The market size or revenue at the end of the period.Beginning Value: The market size or revenue at the start of the period.n: The number of years.
2. Simple Growth Rate
The formula for total percentage growth is:
Growth % = ((Ending Value – Beginning Value) / Beginning Value) × 100
Example Calculation
Suppose a specific niche in the software industry had a market size of $10,000,000 in 2018. By 2023 (5 years later), the market size grew to $18,500,000 .
Beginning Value: $10,000,000Ending Value: $18,500,000Period: 5 Years
Calculation: (18,500,000 / 10,000,000)(1/5) – 1 = 1.1309 – 1 = 0.1309
Result: The CAGR is 13.09% . This indicates a healthy, double-digit annual growth trajectory for the sector.
function calculateMarketGrowth() {
// Clear previous errors
document.getElementById('startError').style.display = 'none';
document.getElementById('endError').style.display = 'none';
document.getElementById('periodError').style.display = 'none';
// Get Input Values
var startVal = parseFloat(document.getElementById('mgrStartVal').value);
var endVal = parseFloat(document.getElementById('mgrEndVal').value);
var years = parseFloat(document.getElementById('mgrPeriod').value);
var hasError = false;
// Validation
if (isNaN(startVal) || startVal <= 0) {
document.getElementById('startError').style.display = 'block';
hasError = true;
}
if (isNaN(endVal)) { // End value can be 0 (total collapse), but usually checked for valid number
document.getElementById('endError').style.display = 'block';
hasError = true;
}
if (isNaN(years) || years 0 && endVal >= 0 && years > 0) {
cagr = (Math.pow((endVal / startVal), (1 / years)) – 1) * 100;
}
// Determine Trend Text
var trendText = "";
var trendColor = "";
if (cagr > 20) {
trendText = "Hyper Growth 🚀";
trendColor = "#27ae60";
} else if (cagr > 10) {
trendText = "Strong Growth 📈";
trendColor = "#2ecc71";
} else if (cagr > 0) {
trendText = "Steady Growth 🐢";
trendColor = "#f39c12";
} else if (cagr === 0) {
trendText = "Stagnation 😐";
trendColor = "#95a5a6";
} else {
trendText = "Market Contraction 📉";
trendColor = "#e74c3c";
}
// Display Results
var currencyFormatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 2
});
document.getElementById('resCAGR').innerHTML = cagr.toFixed(2) + '%';
document.getElementById('resCAGR').style.color = trendColor;
document.getElementById('resTotalPerc').innerHTML = totalGrowthPerc.toFixed(2) + '%';
document.getElementById('resAbsGrowth').innerHTML = currencyFormatter.format(absoluteGrowth);
document.getElementById('resTrend').innerHTML = trendText;
document.getElementById('resTrend').style.color = trendColor;
document.getElementById('mgrResults').style.display = 'block';
}
function resetMgrCalculator() {
document.getElementById('mgrStartVal').value = ";
document.getElementById('mgrEndVal').value = ";
document.getElementById('mgrPeriod').value = ";
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document.getElementById('startError').style.display = 'none';
document.getElementById('endError').style.display = 'none';
document.getElementById('periodError').style.display = 'none';
}