Choose the comparison before interpreting the rate.
Period growth expresses the difference between two comparable values relative to the earlier value. The arithmetic is identical for MoM and YoY; the meaning depends on the periods you choose.
Year-over-year comparison can reduce recurring seasonal effects, while month-over-month change reveals recent movement. Neither method removes acquisitions, price changes or changes to the definition of the metric.
The formula, made clear.
- MoM
- Current month compared with the immediately preceding month.
- YoY
- Current period compared with the same-duration period one year earlier.
Put the numbers in context.
A comparable metric increasing from 100,000 to 125,000 grows 25%, an absolute increase of 25,000 units.
| Input | Example value |
|---|---|
| Previous comparable value | 100,000 units |
| Current comparable value | 125,000 units |
| Comparable-period growth | 25% |
What this calculation assumes
A positive prior value and nonnegative current value, using matching units. Zero starting value has no defined percentage growth. Inputs are dimensionless units and can represent revenue, customers or volume.
What to consider next.
Use compound growth for an equivalent rate across several periods. Examine the actual series before projecting the latest change.
How we approach financial models →