year over year growth
Year over Year Growth compares a number this year to the same number last year, so you can tell if a business is truly growing or just looking busy.
In plain English
Is this business actually growing, or does it just feel that way because this month was better than last month?
That is the exact question Year over Year Growth answers, and it is why finance people almost never compare January to December and call it a day. A shop always sells more in December than in September, that is not growth, that is Christmas. What you want to know is whether this December beat last December.
Take a Lagos business that sells jollof rice spice mixes online. In December 2023 they made ₦8,000,000 in sales. In December 2024 they made ₦10,400,000. You do not compare December to November, because November is always calm and December is always loud, thanks to parties and end of year shopping. You compare December to December, same season, same energy, fair fight. That comparison shows real growth of 30 percent, not a seasonal illusion.
A UK example works the same way. A retailer in Manchester might see sales jump every November because of Black Friday, so nobody gets excited about November beating October. What matters is whether this November beat last November. If it did, the business is genuinely pulling in more customers, more than riding the same wave everyone else rides.
For someone abroad sending money home, this idea calmly matters too. If you are comparing how much you sent this January against last January, rather than against December, you get an honest consider of whether your support is actually increasing or just fluctuating with bonuses and seasons.
Investors, banks and boards lean on Year over Year Growth because it strips out the noise of seasons and shows the real trend underneath, which is really what everyone wants to know before they hand over money or trust.
A Nigerian fintech app had 200,000 active users in March 2023 and 260,000 active users in March 2024. Year over Year Growth equals (260,000 minus 200,000) divided by 200,000, which is 30 percent. Same month, one year apart, a fair and honest comparison.
Questions people ask
Why more than compare this month to last month?
Because many businesses rise and fall with the calendar. Comparing December to November mostly measures Christmas, not company performance. Comparing December to last December removes that seasonal noise and shows the real trend.
What counts as a good Year over Year Growth rate?
It depends on the industry and the economy at the time. A steady 10 percent might be excellent for an established bank, while a young startup might be expected to grow much faster than that to justify investor interest.
Can Year over Year Growth be negative?
Yes, and it simply means the number went down compared to the same period last year. It is not shameful, it is information, and it usually pushes a business to ask honest questions about what changed.
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