Ever wonder how your business is really doing? Sure, you can track month-to-month sales, but that can be a bumpy ride. Enter the magic of year-over-year growth (YOY), a metric that cuts through the noise and reveals the long-term health of your company.
YOY growth measures how a specific business metric (sales, website traffic, social media followers) compares to the same time period in the previous year. It’s like a business report card, showing you if you’re growing, shrinking, or staying steady.
Here’s why YOY should be a staple in your financial toolkit:
The YOY growth formula is pretty straightforward:
YOY Growth = ((Current Year Value – Last Year Value) / Last Year Value) x 100
Let’s say your company’s revenue in June 2023 was $10,000 and in June 2024 it was $12,000.
Here’s how to find your YOY growth:
YOY Growth = ((12,000 – 10,000) / 10,000) x 100 = 20%
Congratulations, your business grew by 20% year-over-year!
YOY growth is just the beginning. Once you have your numbers, use them to:
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