UK Accounting Glossary
Year-over-year (YOY) is a term used frequently in investment research and other reports to mean “compared with the same period in the previous fiscal year.” Here’s an example: In a second-quarter earnings report for a company with a fiscal year-end of June 30, “Net income rose 12.2% year-over-year” means net income for the quarter ended December 31, 2X02, increased 12.2% from the net income reported in the quarter ended December 31, 2X01. Year-over-year is distinguished from quarter-over-quarter (or “sequential”) comparisons, where results are compared to those in the immediately preceding quarter. Most comparisons in investment reports are year-over-year, because most businesses have at least some seasonal variation. For a department store chain where 80% of revenue is recorded in the Christmas quarter, only year-over-year comparisons make sense. But sequential comparisons may usefully accompany year-over-year comparisons — especially in the case of fast-expanding businesses where year-over-year comparisons don’t reflect the rapid rate of expansion. “Year-over-year” is usually unnecessary in full-year comparisons such as “Net income rose 12.2% in 2X02,” where a year-over-year comparison with results in full-year 2X01 can be assumed
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This glossary post was last updated: 4th February 2020.