# What is "5 year growth rate"

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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?

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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.

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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.

Isn't CAGR the same as geometric mean?

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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.

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.

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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.

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)

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