What is "5 year growth rate"

[randomep]

 

On ft.com they have good info on individual stocks. For each stock they give a 5 yr eps growth rate. Can someone define for me how to calculate this exactly?

 

given: r1, r2, r3, r4, r5, how to calculate the growth rate?

 

 

http://markets.ft.com/research/Markets/Tearsheets/Financials?s=WLP:NYQ

 

[constructive]

This type of metric generally uses CAGR (as opposed to arithmetic mean or geometric mean).

 

(r5 / r1) ^ (1/5)

 

r2, r3 and r4 don't matter.

 

http://shouldersofgiantsinvestor.tripod.com/growth.html

[Ham Hockers]

This type of metric generally uses CAGR (as opposed to arithmetic mean or geometric mean).

 

(r5 / r1) ^ (1/5)

 

r2, r3 and r4 don't matter.

 

http://shouldersofgiantsinvestor.tripod.com/growth.html

 

Isn't CAGR the same as geometric mean?

[constructive]

This type of metric generally uses CAGR (as opposed to arithmetic mean or geometric mean).

 

(r5 / r1) ^ (1/5)

 

r2, r3 and r4 don't matter.

 

http://shouldersofgiantsinvestor.tripod.com/growth.html

 

Isn't CAGR the same as geometric mean?

 

Yeah, you're right. It depends on how you calculate geometric mean. I was thinking of using the growth rate versus 1 + growth rate. If you use 1 + growth rate it will give you the same result as the simpler CAGR formula.

[randomep]

This type of metric generally uses CAGR (as opposed to arithmetic mean or geometric mean).

 

(r5 / r1) ^ (1/5)

 

r2, r3 and r4 don't matter.

 

http://shouldersofgiantsinvestor.tripod.com/growth.html

 

Oh so it is that simple.

 

BTW I think it should be

 

(r5/r1)^(1/4)

 

because 2 year grow rate is

 

(r2/r1)^(1)