{"id":14044,"date":"2021-11-25T16:50:51","date_gmt":"2021-11-25T16:50:51","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?post_type=finance-dictionary&p=14044"},"modified":"2025-01-22T16:08:29","modified_gmt":"2025-01-22T10:38:29","slug":"year-over-year","status":"publish","type":"finance-dictionary","link":"https:\/\/www.5paisa.com\/finschool\/finance-dictionary\/year-over-year\/","title":{"rendered":"Year-over-year (YOY)"},"content":{"rendered":"\t\t
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Year-over-year (YOY) growth is a key performance indicator comparing growth in one period (usually a month) against the comparable period twelve months before the previous year, hence the name). Unlike standalone monthly metrics, YOY gives you a picture of your performance without seasonal effects, monthly volatility, and other factors. You see a clearer picture of your actual successes and challenges over time. Unsurprisingly, this is a key metric for retail analytics.<\/p>

The first big advantage of YOY growth is in eliminating seasonality from your growth metrics. Most retailers see a sharp uptick in sales during the holiday season. On a single month basis, this can give a false indication of massive growth.<\/p>

Calculate the\u00a0 Year Over Year\u00a0 (YOY) Growth Rate<\/b><\/h3>

To calculate the (YOY) growth rate, you need two numbers: Last year number & this year number. Steps to follow:<\/p>

  1. Subtract last year’s number from this year’s number. That gives you the total difference for the year. If it’s positive, it indicates a year-over-year gain, not a loss. For example, this year you sold 115 paintings. Last year you sold 110. You sold 5 more paintings this year.<\/li>
  2. Then, divide the difference by last year’s number. That’s 5 paintings divided by 110 paintings. That gives you the year-over-year growth rate.<\/li>
  3. Now simply put it into per cent format. You find 5 \/ 110 = 0.045 or 4.5%.<\/li><\/ol>

    Example: Lets say- in June 2021, total employment was 131.955 million. Total employment in June 2020 was 130.530 million. Here’s how to calculate the year-over-year growth rate.<\/p>

    1. Subtract 130.530 million from 131.955 million. The difference is 1.425 million.<\/li>
    2. Divide 1.425 million by 130.530 million, last year’s employment number.<\/li>
    3. The answer is 0.0109 or 1.09%. That’s the year-over-year growth rate.<\/li><\/ol>

      Pros & cons<\/strong><\/h3>

      Pros-<\/strong><\/p>