Plain definition
Year-on-year growth compares a measure with the same period in the prior year, normally as a percentage of the prior-year amount. It is useful for seasonal businesses only when definitions and periods are comparable.
Illustrative example
Monetary examples use Saudi riyals (SAR). The same principles apply in other currencies.
June revenue rises from to . Growth is 15%: (575,000 − 500,000) ÷ 500,000. The finance lead finds that came from an acquired product line, so underlying growth requires separate disclosure before capacity is expanded.
Why it matters
The comparison can reveal growth beyond normal seasonality, but unadjusted acquisitions or definition changes can create a false expansion signal. That matters before committing capital or hiring.
Practical consequence
State both values, period, formula, and acquisitions, pricing changes, or restatements that affect comparability. A high percentage on a small base is a clue to investigate, not proof of scale.