In this appendix, general expressions for estimating growth rates are presented.
- Compound annual growth (CAGR) rate model
- General model for estimating CFaIAg, the growth rate of Cash Flow after Investing Activities (CFaIA), and NIg, the growth rate of Net Income (NI), from the Investment Rate (IR) and Net Income Return on Capital Employed (NiROCE)
GENERAL COMPOUND ANNUAL GROWTH RATE MODEL
Let VBeg and VEnd represent the beginning and ending values of a series of numbers that develop over n periods. Then VEnd can be expressed in terms of VBeg and n by Equation [C-1].
where: CAGR is the compound annual growth rate1
Taking logarithms of both sides of Equation [C-1],
Multiplying both sides of [C-3] by n−1
Since n−1 (n) = 1 and , Equation ...