The net sales CAGR means the compound annual growth rate of a company's net sales over a specific period of time. It is a measure of the average annual growth rate of net sales, taking into account the effect of compounding. The net sales CAGR is calculated by dividing the value of net sales at the end of the period by the value at the beginning of the period and raising the result to the power of one divided by the number of years. The resulting figure represents the annual growth rate that would be required for the net sales to grow from the beginning balance to the ending balance, assuming profits were reinvested at the end of each period12.