Year-over-Year (YoY) Growth Calculator
Use our free Year-over-Year (YoY) growth calculator to evaluate the annual rate of change in a financial metric.
What is Year-over-Year Growth?
Year-over-year growth (YoY) is a financial metric that compares the financial performance of a company between two years, which are usually one year apart. The YoY growth rate is a way for traders to measure the annual change in a company's finances over time.
YoY Growth Formula
Formula
YoY Growth = (Current Year Value / Previous Year Value) - 1
Where
Current Year Value = the most recently reported annual financial metric value
Previous Year Value = the previously reported annual financial metric value
Year-over-Year Growth Calculation Example
As an example, a company has $30 million in earnings, according to their most recent annual financial report, whereas, the previous year, the company reported $25 million in earnings.
Given the following:
Current Year Value = $30 million
Previous Year Value = $25 million
We then plug the values into the formula to get the YoY growth rate:
YoY Growth = (Current Year Value / Previous Year Value) - 1
YoY Growth = ($30 million / $25 million) - 1 = 0.2 or 20.0%
The result of a 20% year-over-year growth rate indicates that the company grew their earnings by 20% in one year.
Year-over-Year Growth and Financial Analysis
YoY growth is a financial metric that investors and traders use to evaluate the performance of a company over time. It provides a a standardized way of measuring company performance from one year to the next.
A positive YoY growth rate indicates that a company's performance is improving. Whereas, a negative YoY growth rate indicates that company performance is declining.
For example, a 10% YoY earnings growth rate, means a company grew its earnings by 10% in one year, and a -20% YoY earnings growth rate indicates company earnings dropped by 20%.
