Vareto Finance Glossary

Year over Year Growth (YoY Growth)


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.

Why it matters

Companies can use YOY growth rate to easily cross compare two sets of data across different periods. This metric helps in quickly ascertaining whether a company’s performance has improved or worsened over time.