How to calculate year-on-year growth

Year-on-year growth in finance is a measure used to analyze the performance of a financial metric, such as revenue, profit, or investment returns, over a 12-month period. It is often used by businesses and investors to assess the trajectory of financial performance and to make informed decisions about future investments and strategic planning. To calculate year-on-year growth in finance, you can use the following formula: Year-on-Year Growth = ((Current Year Value - Previous Year Value) / Previous Year Value) * 100 Where: - Current Year Value is the financial metric for the current year (e.g., revenue for the current year) - Previous Year Value is the financial metric for the previous year (e.g., revenue for the previous year) To calculate the year-on-year growth using this formula, you simply subtract the previous year value from the current year value, divide the result by the previous year value, and then multiply by 100 to express the result as a percentage. For example, if a company had revenues of $1,000,000 in the previous year and revenues of $1,200,000 in the current year, the year-on-year growth would be: ((1,200,000 - 1,000,000) / 1,000,000) * 100 = (200,000 / 1,000,000) * 100 = 20% This indicates that the company's revenue has grown by 20% year-on-year. Year-on-year growth can also be calculated using other financial metrics, such as profit, investment returns, or market share. By analyzing year-on-year growth, businesses and investors can gain insights into the trends and patterns of financial performance, and use this information to make informed decisions about future strategies and investments. It is important to note that year-on-year growth should be interpreted in the context of the industry and economic conditions to get a more accurate understanding of the financial performance.