The process of determining the percentage difference between a specific period and the corresponding period in the preceding year is a common analytical technique. For example, comparing a company’s revenue for the current quarter with its revenue for the same quarter last year provides insights into growth or decline over that time.
This type of comparison offers significant benefits in various fields. It helps to mitigate the impact of seasonality, providing a more accurate picture of underlying trends. Its historical use stems from the need to understand performance relative to past achievements, particularly in assessing the effectiveness of strategic decisions and identifying areas for improvement.