The month-over-month calculator is an intelligent tool that can help you find the percentage change between values for two different months.
In this article, we will discuss what a month-over-month calculation is, how to calculate month-over-month change and compounding monthly growth rate, and the possible alternatives to the month-over-month calculation.
What does month-over-month mean?
You can use the month-over-month calculator to calculate the percentage change (increase or decrease) between two values representing two different months.
Read on to discover how to calculate month-over-month percentage change and find examples of the calculations.
Month-over-month (MoM) calculations are typical for numerous business functions, like:
- Finance — to monitor MoM change in revenues;
- Marketing — to analyze MoM number of social media followers;
- Sales — to check MoM number of customers; and
- Production — to monitor MoM production volume.
Overall, MoM calculations are useful to understand the performance of a company as well as the performance of different departments.
Likewise, month-over-month percentage change is relevant, e.g., for macroeconomic indicators and analyses. If you want to find out more, check our macroeconomic calculators:
- GDP growth rate calculator to measure the change in Gross Domestic Product (GDP) in a given economy over a specific time; and
- Inflation calculator to determine the inflation rate based on the change in prices.
However, MoM calculations can also be useful in everyday life, for instance, to calculate the monthly change in household spending or energy usage.
How to use the month-over-month calculator
To use the calculator, follow the below steps:
- Enter the value for month 1.
- Enter the value for month 2.
- The month-over-month calculator will display the percentage change (increase or decrease) between months 1 and 2 values. Percentage increase is displayed as a positive number; percentage decrease is a negative number.
In order to calculate the month-over-month change, we use the following month-over-month formula:
— month-over-month; and
and — values in months 1 and 2, respectively.
However, to receive the desired result using this month-over-month formula, always ensure that the values for months 1 and 2 are not less than 0.
What is compounding monthly growth rate (CMGR)?
Compounding monthly growth rate (CMGR) is the average month-over-month percentage change (increase or decrease) over a longer term, usually 6-18 months.
The formula for calculating is:
and — values in month 1 and month 2, respectively; and
— period duration between those months.
For example, if the number of social media followers amounted to 100 in January and 200 in June, then , and the average monthly increase in the number of followers is:
This means that every month between January and June, on average, the number of social media followers increased by .
Alternatives to the month-over-month change
Although a lot can happen in the timespan of one month, bear in mind that this is a relatively short period. Consequently, the MoM change calculations should always be analyzed with a view to understanding factors like seasonality, one-off effects or random fluctuations to provide a complete picture of the company's performance before implementing any action plans.
If you are interested in month-over-month percentage calculators for business analysis, you may also find the below finance calculators useful:
- Revenue growth calculator to understand how much revenue has increased from period to period; and
- Earnings per share growth calculator to analyze the profit growth of your company.
As the period duration increases, such as with quarter-over-quarter (QoQ) or year-over-year (YoY) change, the data becomes more critical as the time horizon offers reliable historical performance. That is why you may find QoQ or YoY change calculations more relevant for business analysis. Click on the Advanced mode button below the calculator to use the QoQ or YoY alternatives.