Year-over-year (YoY) growth represents the percentage change in a metric when comparing one period (typically a month, quarter, or year) to the corresponding period from the previous year. This calculation provides insight into how a business or value is performing relative to its immediate past. For example, to determine YoY sales growth for Q2 2024, sales from Q2 2024 are compared to sales from Q2 2023.
Understanding yearly growth is vital for tracking business performance, identifying trends, and making informed strategic decisions. It allows for a standardized comparison, mitigating the effects of seasonal fluctuations that can skew shorter-term analyses. Analyzing these values over time can reveal patterns, potential problems, or areas of significant expansion, providing valuable information for investors and stakeholders. Historically, this type of analysis provided a clear measure of the overall health and trajectory of an organization.