Reverse CAGR Calculator: How to Calculate Starting Value

Introduction

Most people use CAGR to find how much something has grown — but sometimes, you need to reverse the equation. The Reverse CAGR Calculator helps you determine the starting value when you already know the final value, CAGR, and number of years.

This calculation is invaluable for investors, financial planners, and business analysts who need to estimate initial investments, sales targets, or revenue baselines.

What is reverse CAGR?

Reverse CAGR works by rearranging the standard CAGR formula to find the beginning value instead of the growth rate. It’s the inverse of typical CAGR calculations, allowing you to trace backward from final results to the original point of growth.

For instance, if your company’s sales grew to ₹25 lakh at a CAGR of 10% over 4 years, reverse CAGR helps determine what your revenue was 4 years ago.

Reverse CAGR formula

The standard CAGR formula is:

CAGR = (EV / BV)^(1 / n) − 1

To find the beginning value (BV), rearrange the formula:

BV = EV / (1 + CAGR)^n

Where:

• BV = Beginning Value
• EV = Ending Value
• CAGR = Annual growth rate (in decimal)
• n = Number of years

This formula works in both Excel and calculators — you just invert the power operation used in normal CAGR calculations.

Step-by-step example

Scenario

A mutual fund’s value grew to ₹5,00,000 after 5 years at a CAGR of 12%. What was the starting investment amount?

Step 1: Identify known values

• EV = 5,00,000
• CAGR = 12% or 0.12
• n = 5 years

Step 2: Apply the reverse CAGR formula

BV = 5,00,000 / (1 + 0.12)^5
BV = 5,00,000 / 1.7623
BV = ₹2,84,000 (approx.)

This means you would have invested roughly ₹2.84 lakh five years ago to achieve ₹5 lakh today.

How to calculate reverse CAGR in Excel

Excel makes reverse CAGR easy with a single formula.

Formula method

If your data is:

• Final Value (B2) = 500000
• CAGR (B3) = 0.12
• Years (B4) = 5

Then type in any cell:
=B2/(1+B3)^B4

The result is your starting value. Format it with commas or currency for clarity.

Example

=500000/(1+0.12)^5 → returns ₹2,84,000

Using the POWER function

Alternatively, you can write:
=B2/POWER(1+B3,B4)

This method is cleaner and more scalable when building financial models.

Use cases of reverse CAGR

1. Investment planning

Reverse CAGR helps investors calculate how much they initially invested to achieve current portfolio values. It’s useful when reconstructing historical performance or auditing returns.

2. Business valuation

Businesses use reverse CAGR to estimate initial revenue levels before consistent growth. For example, if revenue today is ₹50 crore after 8 years at 15% CAGR, reverse CAGR estimates what it was when growth began.

3. Goal setting and forecasting

Companies often reverse-engineer sales targets. Knowing the desired CAGR and future goal, reverse CAGR reveals what baseline performance must have been at the starting point.

4. Education and research

Students and financial analysts use reverse CAGR as an exercise to validate CAGR formulas and understand compounding backward.

Common mistakes to avoid

Incorrect CAGR format

Always convert CAGR to a decimal (e.g., 12% → 0.12) before using it in the formula. Using percentage values directly will inflate results.

Negative or unrealistic growth rates

Negative CAGR values can’t be applied directly to reverse calculations without adjustment. For shrinking metrics, use absolute values or calculate percentage decline instead.

Wrong exponent order

Some users accidentally flip the exponent, writing (1+CAGR)^(1/n) instead of (1+CAGR)^n. This mistake yields incorrect results.

Reverse CAGR vs forward CAGR

AspectForward CAGRReverse CAGRPurposeCalculates annual growth rateFinds initial value or starting pointFormula(EV/BV)^(1/n) - 1EV / (1+CAGR)^nUse CaseAssess performanceBack-calculate investments or targetsOutputPercentage rateValue in currency or units

Both methods complement each other — forward CAGR analyzes growth, while reverse CAGR reconstructs the past.

Online reverse CAGR calculators

Several free calculators simplify reverse CAGR computation. Tools like Calculator.net, Groww, and MoneyControl offer input fields for final value, CAGR %, and years, automatically returning the initial value.

For automation across multiple datasets, TROCCO can integrate your business and financial data, while ZyGro applies AI to forecast and reverse-calculate growth across e-commerce or marketing channels.

Conclusion

Reverse CAGR helps you uncover where your growth journey began. Whether you’re verifying investment returns or backtracking business expansion, it provides an accurate baseline for analysis.

Use it with Excel, online calculators, or integrated tools like TROCCO and ZyGro to automate and visualize growth insights effectively.

FAQs on Reverse CAGR Calculation

What is reverse CAGR?

Reverse CAGR is a method to calculate the starting value when you know the ending value, growth rate (CAGR), and time period.

What is the reverse CAGR formula?

BV = EV / (1 + CAGR)^n — where BV is the beginning value, EV is the final value, CAGR is the growth rate, and n is the number of years.

Can I calculate reverse CAGR in Excel?

Yes. Use the formula =EV/(1+CAGR)^n or the POWER function =EV/POWER(1+CAGR,n) for accurate results.

What are the applications of reverse CAGR?

Reverse CAGR is used in investment audits, business analysis, sales forecasting, and financial modeling.

How is reverse CAGR different from CAGR?

CAGR measures growth rate over time, while reverse CAGR back-calculates the original value that led to that growth.