He year-on-year growth (Year-Over-Iar or Yoy) It is a key metric to evaluate the evolution of a business compared to the same period of the previous year. Knowing this figure allows you to understand if your company is moving forward, staging or backing. Fortunately, calculating yoy is a simple process if you follow these four steps.
1. Define the comparison period
Before making any calculation, it is essential to define the periods you are going to compare. He Yoy analyzes the growth of one month, quarter or year compared to the same period of the previous year. This helps eliminate distortions caused by seasonal factors.
For example, if you want to calculate the sales growth of February 2024, you must compare it with February 2023. Thus you will get a more realistic vision of your company's performance.
2. Get the values of both periods
To calculate yoy growth, you need The exact data of the current period and the previous period. These can be income, sales, number of customers, among others.
Continuing with the example of monthly sales, if in February 2023 you invoices 50,000 euros and in February 2024 you reached the 60,000 eurosyou already have the two necessary values for the calculation.
3. Applies the Yoy growth formula
The calculation of year -on -year growth is very simple. The formula is:
Yoy growth = (current value – previous value)/ previous value x 100
Applying the data of our example:
(60,000 – 50,000) / 50,000 x 100
This means that in February 2024 the company grew a 20% compared to the same month of 2023.
4. Analyze the result and make decisions
Knowing the growth percentage is not enough: It is necessary to interpret the result and act accordingly. If growth is positive, you can identify what strategies have worked and reinforce them. If it is negative, it is time to analyze what aspects should improve.
This is where a good Sales CRM, like Pipedriveyou can make a difference. With tools that automate data collection and generate detailed reports, you can monitor your growth more efficiently and make informed decisions based on real metrics.
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Conclusion
Yoy growth calculation is essential to measure the evolution of your business and adjust strategies. Following these four steps you can obtain a key fact to evaluate your performance and improve your planning. And remember, supporting you in appropriate tools can make this analysis more agile and precise.
