Excel Averaging question

[abaez]

I have a group of numbers:
2008 2002
ABC 25 13
BCD 37 12
EFG 42 35
HIJ 32 23

I'm using the growth rate per year formula to calculate the average growth rate for each company:

CAGR: =((End Value/Start Value)^(1/(Periods - 1)) -1

If I wanted to get a rate for all companies combined, would I average each year and then run the CAGR formula on those values (average of average?), or would I sum the all values for each year and run the CAGR?

I'm getting different responses on google.

 

[TheoPetro]

you want the growth rate of the portfolio? I would think you would need to know the weights of each asset in the portfolio before you could see how the whole thing grew. After that you just take the (sum of the final prices - sum of the initial prices) / sum of the initial prices. That gives you the %age change in price which im guessing is what youre calling the growth rate. Just annualize that over the # of periods youre using to get an average growth rate per period.

 

[abaez]

I figured it out. You get the same answer whether you sum or average:

2008 2003
321 123
654 456
987 789
852 258

AVERAGE 703.5 406.5 11.59%
SUM 2814 1626 11.59%