Year-over-year growth (YoY growth) is a form of comparison used while measuring a company's financial performance. It uses numbers from current period to compare against the same month of the previous year. This measurement tool can offer better insights than a month-to-month comparison since it eliminates seasonal anomalies.Businesses commonly use quarter, annual or monthly figures for YoY growth rate checks.
Year over Year Growth (YoY) = (Current period figures / Prior period figures ) – 1Suppose a company’s revenue rose from $25 million in Year 1 to $30 million in Year 2. The YoY growth rate will be:($30 million / $25 million) – 1 = 20.0%. The result is the variance between the two periods.