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Year Over Year Growth Formula:
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Year Over Year (YoY) sales growth measures the percentage change in sales between the current period and the same period in the previous year. It provides a standardized way to compare business performance across different time periods.
The calculator uses the YoY growth formula:
Where:
Explanation: The formula calculates the percentage change between current and previous period sales, providing a clear measure of growth or decline.
Details: YoY growth analysis is crucial for business performance evaluation, trend identification, strategic planning, and investor reporting. It helps eliminate seasonal variations and provides a clear picture of business growth trajectory.
Tips: Enter current and previous period sales in currency units. Both values must be positive numbers, with previous period value greater than zero for accurate calculation.
Q1: What is considered good YoY growth?
A: Good YoY growth varies by industry, but generally 10-20% annual growth is considered strong for most businesses. Growth rates should be compared against industry benchmarks.
Q2: How does YoY differ from quarter-over-quarter (QoQ)?
A: YoY compares the same period across different years, eliminating seasonal effects, while QoQ compares consecutive quarters, which may be affected by seasonality.
Q3: Can YoY growth be negative?
A: Yes, negative YoY growth indicates a decline in sales compared to the previous year, which may signal business challenges or market changes.
Q4: What factors can affect YoY growth?
A: Market conditions, competition, economic factors, product launches, marketing efforts, and customer behavior can all impact YoY growth rates.
Q5: How often should YoY growth be calculated?
A: YoY growth is typically calculated monthly, quarterly, and annually to track business performance trends over time.