How to Calculate Growth Rate Year Over Year

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Year Over Year (YoY) Growth Rate Calculator

Growth Rate Percentage:
function calculateGrowthRate() { var prevValue = document.getElementById('prevValue').value; var currValue = document.getElementById('currValue').value; var resultDiv = document.getElementById('resultDisplay'); var resultSpan = document.getElementById('yoyResult'); var prev = parseFloat(prevValue); var curr = parseFloat(currValue); if (isNaN(prev) || isNaN(curr)) { alert("Please enter valid numerical values for both periods."); return; } if (prev === 0) { resultSpan.innerHTML = "Undefined"; resultSpan.style.color = "#d93025"; alert("Previous period value cannot be zero as it results in a division by zero error."); return; } var growth = ((curr – prev) / Math.abs(prev)) * 100; resultSpan.innerHTML = growth.toFixed(2) + "%"; if (growth > 0) { resultSpan.style.color = "#1e8e3e"; } else if (growth < 0) { resultSpan.style.color = "#d93025"; } else { resultSpan.style.color = "#1a73e8"; } resultDiv.style.display = "block"; }

Understanding Year Over Year (YoY) Growth

Year over Year (YoY) growth is a key performance indicator used to compare financial results or data points from one period to the same period in the previous year. Unlike monthly comparisons, YoY accounts for seasonality, giving a clearer picture of long-term performance.

The YoY Growth Formula

YoY Growth Rate = [(Current Period Value – Previous Period Value) / Previous Period Value] × 100

Why YoY Growth Matters

  • Eliminates Seasonality: Retailers often see a spike in December. Comparing December to November might show huge growth, but comparing December this year to December last year shows the actual trend.
  • Investor Analysis: Stock analysts use YoY figures to determine if a company's growth is accelerating or slowing down.
  • Benchmark Tracking: It provides a consistent metric to gauge if business strategies are yielding results over time.

Real-World Example

Imagine your e-commerce store generated 50,000 units in sales in 2022. In 2023, the store generated 65,000 units. To find the growth rate:

  1. Subtract the previous value from the current value: 65,000 – 50,000 = 15,000.
  2. Divide the difference by the previous value: 15,000 / 50,000 = 0.3.
  3. Multiply by 100 to get the percentage: 0.3 × 100 = 30% growth.

Interpreting Negative Results

A negative YoY growth rate indicates a decline in performance. For instance, if your website traffic was 10,000 visitors last year but only 8,000 this year, you would have a -20% growth rate. This signals a need to investigate market shifts or internal strategy effectiveness.

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