What is Year Over Year (YoY) Growth?
Year-over-Year (YoY) Growth measures the rate of change over the previous year. It’s widely used to track progress and evaluate trends in business, finance, and economic indicators. By comparing metrics like revenue, profit, or other relevant financial data from one period to the same period a year earlier, YoY analysis provides a clear picture of performance growth.
How to Use the Year Over Year Growth Calculator
- Input Last Year’s Value: Start by entering the metric value for the previous year.
- Input Current Year’s Value: Enter the value for the current year.
- Get Your YoY Growth Result: The calculator will instantly show the YoY growth percentage, giving you a quick understanding of your growth rate.
Example Calculation of Year Over Year (YoY) Growth
If your company had $100,000 in revenue last year and $120,000 this year, here’s how the YoY calculation would work:
- YoY Growth =
(CurrentValue-PreviousValue)/PreviousValue(Current Value – Previous Value) / Previous Value* 100
- Using our example:
(120,000-100,000)/100,000(120,000 – 100,000) / 100,000* 100 = 20% growth
Why Calculate YoY Growth?
Year Over Year Growth is a reliable metric for tracking consistency and trends over time. It’s particularly helpful because it removes the impact of seasonal fluctuations, providing a more accurate picture of long-term trends and performance.
Benefits of Calculating YoY Growth
- Trend Analysis: Easily compare growth or decline trends over time.
- Goal Setting: Set benchmarks based on historical performance.
- Investment Decisions: Investors often use YoY growth to evaluate the health and growth potential of businesses.
How to Calculate YoY Growth Manually
- Subtract last year’s metric from this year’s metric.
- Divide the result by last year’s metric.
- Multiply by 100 to get the YoY growth percentage.
For example, if you’re comparing profits, sales, or other financial metrics, using the YoY formula is straightforward and reveals the annual growth rate.