Calculate CAGR, MoM, YoY, and simple growth rates
Growth rates measure how quickly your business metrics are changing over time. Different calculation methods are appropriate for different situations and time periods.
Growth Rate = ((Ending Value - Starting Value) / Starting Value) × 100
When to use: Measuring total growth over any single period. Simple to understand and communicate.
Example: Revenue grew from $100K to $150K = 50% growth
CAGR = ((Ending Value / Starting Value)^(1/Years) - 1) × 100
When to use: Measuring average annual growth over multiple years. Smooths out volatility.
Example: $100K to $150K over 3 years = 14.47% CAGR
MoM = ((Ending Value / Starting Value)^(1/Months) - 1) × 100
When to use: Tracking short-term momentum and recent trends. Common for startups.
Example: Growing 10% MoM compounds to 214% annual growth
YoY = ((This Year - Last Year) / Last Year) × 100
When to use: Comparing same period across years. Accounts for seasonality.
Example: Q4 2024 revenue vs Q4 2023 revenue
| Stage | Expected Annual Growth | MoM Equivalent |
|---|---|---|
| Early Stage (Pre-Seed/Seed) | 300-500%+ | 12-15%+ |
| Growth Stage (Series A/B) | 100-300% | 6-12% |
| Late Stage (Series C+) | 50-100% | 3-6% |
| Mature (Public) | 10-30% | 0.8-2.2% |
For SaaS companies, the sum of growth rate and profit margin should exceed 40%:
Large differences indicate volatility or non-linear growth:
Example 1: Steady Growth
$100K → $150K → $225K → $338K over 3 years
Example 2: Volatile Growth
$100K → $300K → $250K → $338K over 3 years
High MoM growth compounds dramatically:
| MoM Growth | Annual Growth | 10× in |
|---|---|---|
| 5% | 80% | 48 months |
| 10% | 214% | 25 months |
| 15% | 435% | 16 months |
| 20% | 791% | 13 months |
High growth rates are meaningless without context:
Always specify the time frame:
Simple but often inaccurate for growing businesses:
Future Value = Current Value + (Growth × Periods)
More accurate for sustained growth:
Future Value = Current Value × (1 + Growth Rate)^Periods
Account for growth rate deceleration:
Rule of 72:
Time to double = 72 / growth rate
10× Growth: