Year-over-Year Growth Calculator

YoY (year-over-year) is the percent change between two adjacent periods: (current - previous) / |previous| * 100. It tells you how the most recent year compared to the one before it. CAGR (Compound Annual Growth Rate) is the constant annual rate that would have taken the start value to the end value if growth had been perfectly smooth: ((end / start)^(1/years) - 1) * 100. Use YoY for a single one-year comparison; use CAGR when you have a multi-year horizon and want one annualized number. Example: revenue of $1M, $1.5M, $1.2M in 2023, 2024, 2025 has a +50% YoY in 2024, a -20% YoY in 2025, and a CAGR over the two years of roughly +9.5% per year.

CAGR collapses lumpy real-world returns into one constant rate. A portfolio that goes 1000, 1500, 900, 1200 over three years did not grow at the same pace each year, but its CAGR (about +6.27%) is the single annual return that would have produced the same start-to-end result with no volatility. That smoothing is exactly the point: it makes two investments with very different yearly paths directly comparable. The trade-off is that CAGR hides volatility entirely; a 6.27% CAGR could come from a steady +6.27% every year or from wild swings that happen to average out. Pair CAGR with a standard deviation or max drawdown when you need the full picture.

The Rule of 72 is a mental-math shortcut for how long an investment takes to double: years to double is approximately 72 divided by the annual return in percent. At 8%, money doubles in roughly 72 / 8 = 9 years. The exact formula is ln(2) / ln(1 + r), which at 8% gives 9.006 years; the Rule of 72 is accurate to within a few percent in the 6 to 12 percent range and starts to drift at the extremes. This calculator returns the exact doubling time in CAGR mode whenever the rate is positive. Some practitioners use the Rule of 70 (a hair more accurate near 7 percent) or Rule of 69.3 (continuous-compounding limit); the differences are small enough that the Rule of 72 wins on convenience.

The denominator matters enormously. YoY of (current - previous) / |previous| explodes when the previous value is small: $1,000 to $11,000 is +1000%, while $100,000 to $110,000 is +10% even though the absolute dollar gain is identical. That is why a 300% YoY growth headline for a brand-new SaaS startup means much less than a 15% YoY at Apple. Two specific traps: (1) base-effect rebounds after a crash (going from 50 to 100 is +100%, but you have only recovered to half of the prior peak of 200), and (2) the inability to compute YoY at all when the previous value is zero or negative. For early-stage businesses, absolute dollars and CAGR over a longer window usually communicate the trend more honestly than a single eye-catching YoY number.

Almost any time the holding period is longer than one year. Mutual funds and ETFs publish 3-year, 5-year, and 10-year CAGR (sometimes labeled annualized return or AAR) in their prospectuses; that is the number Morningstar ranks against the category benchmark. Equity research uses CAGR for revenue and earnings projections over a 5-year forecast horizon. Private equity reports IRR (the cash-flow-weighted cousin of CAGR) for fund-level returns. The S&P 500 long-run nominal CAGR is about 10% (about 7% real after inflation). YoY shows up for single-period prints (last quarter's same-store-sales YoY, last month's payroll YoY) where you specifically want the latest change, not the multi-year trend. A good analyst usually reports both.