UK Accounting Glossary
Year Over Year (YOY) refers to the mathematical process of comparing one year of data to the previous year of data.
Year-Over-Year is a frequently used financial term and put simply it is where you compare the results from one year to another to identify annual trends, shifts in the market, or changes in performance amongst other things. A year-over-year (YOY) analysis is where you compare the results from one year with the results for the same period the year before. When completing a year-over-year analysis people will often look at the same month in each year, or the same quarter of each year. The year-over-year growth rate determines the percentage change that has occurred throughout the last 12 months.
By looking at the year-over-year performance you are able to gauge whether a company’s financial position is worsening, staying the same, or improving. For example, you may read that a company has recorded a growth in sales and revenues in the second quarter for the third year in a row.
Explanation of Year-Over-Year
A year-over-year comparison is an effective and popular way to evaluate both the performance of investments and the performance of a company. Any event that is both measurable and repeats annually can be evaluated using a year-on-year analysis. Often companies will use a year-on-year analysis to measure compare monthly, quarterly or annual performance.
Key things to remember
Pros and Cons of year-over-year analysis
Pros of year-over-year analysis
Cons of year-over-year analysis
Something to remember: it is not considered a good idea to just rely on the year-over-year analysis of a companies financial position. It is useful to look at the monthly’s as well and be certain to use other metrics to give you a complete picture.
Calculating Year-Over-Year (YOY)
The £14.7 million figure expressed above represents 34.7% growth year-over-year.
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Definitions for Year Over Year (YOY) are sourced/syndicated from:
This glossary post was last updated: 21st July 2019.