1. What is Year Over Year Growth?

Year Over Year (YoY) growth is a comparison of one year's performance with another's, typically expressed as a percentage. It's a key metric for analyzing business performance, economic trends, and investment returns.

2. How Does the Calculator Work?

The calculator uses the YoY growth formula:

Where:

• \( New \) — Current period value (USD)
• \( Old \) — Previous period value (USD)

Explanation: The formula calculates the relative change between two periods, showing how much something has grown or shrunk compared to the previous year.

3. Importance of YoY Growth Calculation

Details: YoY growth eliminates seasonal effects and provides a clearer picture of long-term trends than month-to-month comparisons. It's widely used in financial analysis, business strategy, and economic reporting.

4. Using the Calculator

Tips: Enter both values in USD. The old value must be greater than zero. Positive results indicate growth, negative results indicate decline.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between YoY and QoQ?
A: YoY compares annual periods, while QoQ (Quarter over Quarter) compares consecutive quarters, which is more sensitive to short-term changes.

Q2: How is YoY different from CAGR?
A: YoY shows annual changes, while CAGR (Compound Annual Growth Rate) smooths growth over multiple years into an average annual rate.

Q3: When is YoY growth most useful?
A: Best for businesses with seasonal patterns or when comparing annual performance metrics like revenue, profit, or user growth.

Q4: What are limitations of YoY growth?
A: Doesn't account for compounding effects over multiple years and can be misleading if there were one-time events in either year.

Q5: How should I interpret negative growth?
A: Negative growth indicates decline. The larger the negative percentage, the greater the decline compared to the previous year.