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Growth from year to year (Yoy) is an indicator of success that investors often use to measure financial progress and compare results from one period to another. Measurement, which considers changes in two comparable time periods, can provide valuable information about trends, risks and capabilities. Investors can then use this data assessment data and Company valueSector or market, thus making informed financial decisions.
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In the heel Growth is a percentage change In certain revenues of metrics, earnings or customers from one year to the next. It helps you evaluate the main metric shares growing over time and identify all trends or patterns. For example, if the company sales increased by 10% in 2025. Compared to 2024, this would mean 10% growth compared to the year.
Yoy is often used to compare growth from a quarter of one year to the same quarter in the previous year. This helps smooth out all the effects due to seasonality and gives a more accurate picture of the company performance.
As an example, the fourth quarter is the most important quarter for a retail company because of the holidays. As such, comparing a company performance in the fourth quarter 2025. With the fourth quarter 2024, it would give a better show about the effect of the company than if you would compare it to the third quarter 2025.
On the other hand, the company could try to show impressive quarterly performance, but it may not show that it improves for a long period of time when it is calculated year by year. Or, the company could claim that its overall effect is growing, when, in reality, individual quarters show different trends.
Calculation of YOY growth, therefore, offers a better understanding of true business performance of the company because it adapts to all seasonality effects.
An investor that assesses the growth of a company year after year.
To calculate the growth of Yoy, you can use this simple formula:
Yoy growth (%) = (the value of the current year – value of the previous year) / value of the previous year x 100
For example, if the company’s revenue was $ 1,000,000 at $ 2024 and $ 1,200,000 at 2025, Yoy growth would be 20%. Would look math:
Growth of Yoy can be positive or negative, depending on whether the value of the current year is higher or lower than the value of the previous year. The positive growth of Yoy shows an increase, while the negative growth of Joy shows a decrease.
You can also calculate the growth of Yoy for each quarter comparing the same quarter at different years. For example, if the company’s revenue was $ 250,000 in the first quarter of the 2024 and $ 300,000 in the first quarter of 2025, Yoy growth for Q1 would be 20%. To make this calculation, you would simply replace the three -month numbers for the annual numbers used in the upper formula.
Growth growth is important for considering investors because it provides an insight of ua The financial effect of the companytrends and growth paths over time.
Here are three key advantages of using measuring data compared to one year when Making investment decisions::
Helps monitor the performance of the company. Yoy Growth allows investors to monitor the performance of a company and its different measuring data such as income, get costs, and then estimate trends and patterns over time. It also helps to identify the effects of seasonality, allowing investors to make in more detail comparison.
Allows comparisons. Calculation of the growth of individual measuring data for companies facilitates investors comparison in companies, sectors or markets. They can evaluate which companies grow faster and evaluate how similar companies do. This helps with relative evaluation by helping to identify underpassed and overpriced companies when Assessment of stock prices.
Provides signals on risks and capabilities. Yoy growth can also provide important signals for investors about risks and capabilities. For example, growth growth that is consistently positive and speeds up indicates other words with great growth, opportunity. Meanwhile, Yoya growth that slows down or turns negatively may indicate a potential risk or a sign of a problem.
Another advantage of calculating growth of Yoy is their simplicity. The calculation is easy to understand and calculate, even for beginners or Owners of small businesses who first create balance sheets. Focusing only on two latest periods, growth yoy also filters every daily fluctuation in financial effect.
An investor who adapted to his investment portfolio.
Yoya growth could help investors compare the effect of a company with competitors in time. It can also show the progress and momentum of the company, but it should not be used alone. A combination with other financial measuring data will give you a clearer image of the value of the company.
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