Discover the most frequently used finance functions with our video series, starting with an in-depth look into the RATE function and its application in calculating the Compound Annual Growth Rate (CAGR).
In the set of the next 5 videos, we will talk about the most frequently used finance functions.
First, let’s talk about the RATE function. It returns the interest rate per period of an annuity
In the given example we have revenue, COGS, and gross profit for three historical and three projected years. We want to calculate CAGR.
The compound annual growth rate (CAGR) is therate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment’s life span.
L10 = RATE(3,0, G10, -J10)
Our revenue CAGR is 14% and gross profit CAGR is 18%.
How to Learn Financial Modeling
Master financial modeling with hands-on training. Financial modeling is a technique for predicting the financial performance of a business or other type of institution over time using real-world data.
