I have a question regarding Year-Over-Year (YOY) as I am really confused right now. Why is YOY important?
Many business and economic metrics are seasonal - for example, many retailers make the majority of their revenue in the fourth quarter due to holiday sales. Many business make the majority of their revenue in summer months, or winter months (e.g. ski resorts).
So comparing one quarter or month to just the previous one is not always informative. It's often more informative to compare metrics to the same period in the prior year, to make sure that growth and other changes are not due to seasonality.
As Year-Over-Year(YOY) can compare each metrics that repeat on annual, quarterly, or monthly basis across the company's reporting requirements. One of the major reason when analyzing performance in any category. Moreover, it also offers an objective view of overall performance.
There are many reasons to consider YOY, some of them include, show you what works and what does not, assist you in obtaining investments, put seasonality in the proper context, supports you in identifying errors, and much more.