4 easy steps to calculate your company’s YoY growth

The year-over-year (YoY) growth is a key metric for assessing the evolution of a business in comparison with the same period of the previous year. Knowing this figure allows you to understand whether your company is advancing, stagnating, or declining. Fortunately, calculating the YoY is a straightforward process if you follow these four steps.

1. Define the comparison period

Before making any calculations, it is essential to define the periods you will compare. YoY analyzes the growth of a month, quarter, or year compared to the same period of the previous year. This helps to eliminate distortions caused by seasonal factors.

For example, if you want to calculate the sales growth for February 2024, you should compare it with February 2023. This will provide a more realistic view of your company’s performance.

2. Obtain the values for both periods

To calculate YoY growth, you need the exact data for the current and previous periods. These can be revenue, sales, number of customers, among others.

Continuing with the example of monthly sales, if in February 2023 you billed $55,000 and in February 2024 you reached $66,000, you already have the two necessary values for the calculation.

3. Apply the YoY growth formula

The calculation for year-over-year growth is very simple. The formula is:

YoY Growth = (current value – previous value) / previous value x 100

Applying the data from our example:

(66,000 – 55,000) / 55,000 x 100

This means that in February 2024 the company grew by 20% compared to the same month in 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 which strategies have worked and reinforce them. If it is negative, it is time to analyze which aspects need improvement.

This is where a good CRM like Pipedrive 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

The calculation of YoY growth is crucial for measuring the evolution of your business and adjusting strategies. By following these four steps you will obtain a key datum for evaluating your performance and improving your planning. And remember, relying on the appropriate tools can make this analysis more agile and precise.