What is YOY – Year Over Year?

YOY is a financial comparison used for comparing a year’s results against the previous. This allows a company to see if the performance of the metric is improving or declining.

Using YOY is common when analyzing the performance of investments and companies. YOY comparison may be used to compare annual, quarterly, or monthly results.

At a Glance

YOY is helpful for analyzing the annual performance of a particular metric.
It is popular for evaluating the overall financial performance of a business.
Investors will often use YOY reporting to predict the performance of an investment or company.

What Are the Benefits of Using YOY Reporting?

The most useful benefit of YOY reporting is to show the performance trajectory of a business. Is it improving the metric overall or declining? It allows a company or investor to compare the results against similar times the previous year and therefore is more reliable than comparing months where peak seasons can affect the results. It also allows the comparison of holiday seasons, with the exception of Easter, which can change yearly.

Comparing months or quarters in the same year will not be an accurate metric of company or investment growth. Some businesses may be more profitable at the start of the year or the end of the year, depending on the product or service. By comparing year over year results, it gives a much more accurate picture.

Examples of Year Over Year Reporting

In 2019, Kelloggs released results for the fourth quarter of 2018. While their sales increased after some corporate acquisitions, their YOY earnings declined. By comparing a number of YOY financial metrics in the company, investors can get a bigger picture of the company’s overall performance.

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