Year-over-year growth, often abbreviated as YoY, represents the percentage change in a specific metric between one year and the corresponding period of the previous year. It serves as a critical indicator of a business’s performance and overall health. For instance, a company might track YoY revenue growth to understand if sales are increasing, decreasing, or stagnating compared to the previous year’s sales figures.
Analyzing growth rates helps organizations identify trends, make informed decisions, and understand the effectiveness of implemented strategies. It allows for a consistent benchmark, mitigating the impact of seasonal fluctuations or short-term anomalies that might skew other comparative analyses. Businesses use YoY calculations to assess progress against goals, attract investors, and guide operational adjustments.
