The reason this mean is called geometric is that a rectangle with sides of length 2 and 8 has the same area as a square with sides of length 4. In the example shown GEOMEAN is used to calculate a compound annual growth rate. This video show how to calculate the geometric mean and discusses its applications.
Listed below is the percent increase in sales for the MG Corporation over the last 5 years.
491 575 812 and 2160. The geometric mean is also referred as the compounded annual growth rate as the average rate of return values are calculated based on the product of the terms. Just follow the steps outlined in the section below titled Calculating Geometric Means with Negative Values. Use the 2 decimal values to find the geometric mean.