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Year Over Year Growth Formula:
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Year Over Year (YoY) growth rate is a key financial metric that compares the performance of a company, investment, or economic indicator from one year to the next. It provides insights into growth trends and helps identify patterns over time.
The calculator uses the Year Over Year growth formula:
Where:
Explanation: The formula calculates the percentage change between the current period and the same period in the previous year, providing a clear measure of growth or decline.
Details: YoY growth analysis is crucial for businesses to track performance, make strategic decisions, identify trends, and compare results across different time periods while eliminating seasonal variations.
Tips: Enter current year value and previous year value in the same units. Both values must be positive numbers greater than zero for accurate calculation.
Q1: What does positive vs negative YoY growth indicate?
A: Positive YoY growth indicates improvement or expansion, while negative YoY growth suggests decline or contraction in performance.
Q2: How is YoY different from sequential growth?
A: YoY compares the same period year-over-year, while sequential growth compares consecutive periods (month-over-month or quarter-over-quarter).
Q3: What are typical YoY growth benchmarks?
A: Growth rates vary by industry, but generally 5-15% is considered good, while 15%+ is excellent for most businesses.
Q4: Can YoY be used for any time period?
A: While designed for annual comparisons, the same principle applies to any consistent time period comparison (month-over-month, quarter-over-quarter).
Q5: What are limitations of YoY analysis?
A: YoY may not capture short-term trends and can be affected by one-time events or anomalies in either comparison year.