YoY removes seasonality by comparing identical periods (Corporate Finance Institute, 2022).
Mature firms aim for 5–10 % annual growth; startups push for 50 %+ (KPMG Global Tech Report, 2023).
Division by zero occurs if the earlier value equals 0 (ISO 80000-2, 2019).
Global GDP CAGR was 3.4 % from 2010-2020 (World Bank Data, 2021).
“Real growth equals nominal growth minus inflation” (BLS CPI Handbook, 2022).
FAQ
What is year-over-year growth?
YoY growth measures the percentage change between the same period in two consecutive years, giving a clear trend free of seasonal swings (Investopedia, 2023).
Why compare identical periods?
Matching quarters or months cancels cyclical effects—retail sees holiday spikes, agriculture sees harvest peaks—so like-for-like data stays comparable (Harvard Business Review, 2022).
What counts as healthy growth?
Growth above sector averages and inflation—roughly 5–10 % for established firms—is considered healthy, while anything below inflation erodes real gains (PwC Annual CEO Survey, 2023).
How do I read negative results?
A negative YoY shows contraction; a −7 % drop means current output is 7 % below last year’s level, signaling cost reviews or strategy shifts (McKinsey Insights, 2022).
Can I use this for non-financial data?
Yes—apply the same formula to website visits, energy output, or headcount; any numeric series works (Google Analytics Help, 2023).
How does YoY differ from CAGR?
YoY is a single-year snapshot; CAGR smooths multi-year growth through compounding: $$\text{CAGR} = \left( rac{\text{End}}{\text{Start}}\right)^{1/n}-1$$ (Morningstar Methodology, 2022).
How often should I update inputs?
Feed new data as soon as a reporting period ends; timely updates keep trend lines current and support faster decisions (Deloitte CFO Signals, 2023).
What if the earlier value is zero?
The formula breaks because you divide by zero; instead, list the absolute change or wait until a second full period exists (OECD Statistics Guidelines, 2022).
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