The LAG function is a powerful tool in SQL that enables you to reference data from previous rows within a result set. Imagine you have a table tracking daily sales figures. Using LAG, you can easily compare today's sales to yesterday's, or calculate the difference in sales between consecutive days. This is crucial for time-series analysis and various data manipulation tasks. It's particularly helpful when working with ordered data, such as sales records, stock prices, or website traffic logs. The LAG function is part of the window functions in SQL, which operate on a set of rows related to the current row, rather than just the current row itself. This allows for a more comprehensive analysis of data patterns and trends. The LAG function is widely used in data warehousing, business intelligence, and reporting applications. It's a fundamental concept for anyone working with time-dependent data.