1. What is Year Over Year Growth?

Year Over Year (YoY) growth is a key performance indicator that compares a company's current period performance with the same period from the previous year. It's commonly used to analyze sales, revenue, or other business metrics to assess growth trends.

2. How Does the Calculator Work?

The calculator uses the Year Over Year Growth formula:

Where:

• \( \text{Current Sales} \) — Sales in the current period (USD)
• \( \text{Prior Sales} \) — Sales in the prior year period (USD)

Explanation: The formula calculates the percentage change in sales between two comparable periods, typically the same period in different years.

3. Importance of YoY Growth Calculation

Details: YoY growth is crucial for understanding business performance, identifying trends, and making informed strategic decisions. It eliminates seasonal fluctuations by comparing the same periods year after year.

4. Using the Calculator

Tips: Enter current period sales and prior year period sales in USD. Both values must be positive numbers, with prior sales greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: Why use YoY instead of sequential growth?
A: YoY growth accounts for seasonality in business cycles, while sequential (month-to-month) comparisons can be misleading due to seasonal patterns.

Q2: What is considered good YoY growth?
A: This varies by industry, but generally 10-15%+ is considered strong growth for established companies, while startups may aim for higher rates.

Q3: How should currency fluctuations be handled?
A: For multinational companies, it's best to use constant currency values to eliminate the impact of exchange rate changes.

Q4: Can YoY be negative?
A: Yes, negative YoY indicates declining sales compared to the prior year period.

Q5: How does this differ from CAGR?
A: YoY measures growth between two specific periods, while CAGR (Compound Annual Growth Rate) calculates the mean annual growth rate over multiple years.