yearoveryear

Year-over-year, often abbreviated YoY, refers to the comparison of a metric in a given period with the same period one year earlier. It is used to assess growth and change while accounting for typical seasonal patterns.

Calculation and interpretation: YoY growth is calculated as ((Current period value - Prior year same period value) / Prior year same period value) × 100%. The result is a percentage that indicates how much the metric has risen or fallen compared with the same period in the previous year. This helps analysts identify longer-term trends beyond short-term fluctuations.

Examples: If a company reports quarterly sales of 120 million in Q2 2024 and 114 million in Q2 2023, the YoY growth is 5.3%. In macroeconomics, GDP growth is often reported on a year-over-year basis to smooth out seasonal effects and highlight underlying economic momentum.

Uses and contexts: YoY comparisons are widely used in finance, corporate earnings reporting, retail analytics, and macroeconomic statistics to track performance, gauge seasonality, and inform planning and forecasting.

Limitations and considerations: YoY can be distorted by one-off events, currency fluctuations, or changes in calendar length (such as leap years or 53-week years). When comparing monetary values, inflation and price level changes should be considered, and real-terms YoY figures may be preferred for meaningful analysis.

Related terms and variants: Other measures include quarter-over-quarter (QoQ) and month-over-month (MoM) changes, as well as compound annual growth rate (CAGR). YoY is especially useful for assessing longer-term trends while QoQ or MoM highlights more recent shifts.