Year-Over-Year Percentage Change Calculation: How-To
September 8, 2023 by JoyAnswer.org, Category : Finance
How do you calculate year-over-year percentage change? Learn how to calculate year-over-year percentage change for financial or performance analysis with a detailed guide.
How do you calculate year-over-year percentage change?
Calculating year-over-year (YoY) percentage change is a useful method for analyzing data trends over a one-year period. It is commonly used in business, economics, and other fields to assess growth or decline. To calculate YoY percentage change, follow these steps:
Select Your Data Points:Choose two time periods to compare, typically a year apart. For example, you might compare sales figures from January 2022 to January 2023.
Determine the Starting Value (Previous Year):Identify the data point for the earlier period. This is often referred to as the "previous year" value. For example, if you're looking at monthly sales, the January 2022 sales figure is your starting point.
Identify the Ending Value (Current Year):Find the data point for the more recent period. This is typically referred to as the "current year" value. Using the example, this would be the January 2023 sales figure.
Calculate the Difference:Subtract the starting value (previous year) from the ending value (current year).
YoY Change = Current Year Value - Previous Year Value
Calculate the Percentage Change:To express this difference as a percentage, divide the change by the previous year value and multiply by 100 to get the YoY percentage change.
YoY Percentage Change = [(Current Year Value - Previous Year Value) / Previous Year Value] * 100
Interpret the Result:The resulting percentage change will tell you whether the data has increased or decreased over the year. A positive percentage indicates growth, while a negative percentage indicates a decline.
Example:Let's say you want to calculate the YoY percentage change in sales from January 2022 to January 2023.
- January 2022 Sales: $50,000 (Previous Year Value)
- January 2023 Sales: $60,000 (Current Year Value)
YoY Change = $60,000 - $50,000 = $10,000
YoY Percentage Change = [($60,000 - $50,000) / $50,000] * 100 = ( $10,000 / $50,000) * 100 = 20%
In this example, the YoY percentage change in sales from January 2022 to January 2023 is a positive 20%, indicating a 20% increase in sales over the year.
This method can be applied to various types of data, such as revenue, population, or any other metric you want to analyze for year-to-year changes.
