What is YoY? Year-Over-Year Metrics Explained

Year-over-year (YoY) is a method of comparing financial or operational data from one period to the same period in the previous year. It helps to identify trends and gauge performance over time, eliminating the impact of seasonality.

In this guide, you'll learn:

How YoY is calculated
The benefits of using YoY analysis
Common applications of YoY
Potential pitfalls to avoid

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Updated on

August 12, 2024

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Glossary

Year over year

How is YoY calculated?

The YoY percentage change is calculated using the following formula:

YoY % Change = [(Current Period Value - Prior Year Period Value) / Prior Year Period Value] x 100

For example, if a company's revenue in Q2 2024 was $150,000 and its revenue in Q2 2023 was $120,000, the YoY percentage change would be:

YoY % Change = [($150,000 - $120,000) / $120,000] x 100 = 25%

This indicates that the company's revenue increased by 25% in Q2 2024 compared to Q2 2023.

What are the benefits of using YoY analysis?

Identifies trends: YoY helps to spot upward or downward trends in performance over time.
Eliminates seasonality: By comparing the same periods in different years, YoY removes the impact of seasonal fluctuations.
Easy to understand: YoY is a simple and intuitive metric that is easy for most people to grasp.
Widely applicable: YoY can be used to analyze a variety of financial and operational data.

What are some common applications of YoY?

Financial analysis: YoY is frequently used to track changes in revenue, profit, expenses, and other key financial metrics.
Sales analysis: YoY can be used to monitor sales growth or decline over time.
Marketing analysis: YoY can help to assess the effectiveness of marketing campaigns by tracking changes in website traffic, leads, or conversions.
Operational analysis: YoY can be used to monitor changes in productivity, efficiency, or other operational metrics.

What are some potential pitfalls to avoid when using YoY?

Short-term fluctuations: YoY can be sensitive to short-term fluctuations in data. It's important to look at YoY trends over a longer period to get a more accurate picture of performance.
External factors: YoY may not always reflect the true underlying performance of a business if there are significant external factors at play, such as economic conditions or natural disasters.
Data quality: The accuracy of YoY analysis depends on the quality of the underlying data. It's important to ensure that data is collected and recorded consistently.

Conclusion

This guide has offered a comprehensive overview of YoY metrics. For those seeking to deepen their understanding, we recommend exploring our guide on Key Performance Indicators (KPIs), which dives into various performance measurement tools and their implications in greater depth.

Year-over-year FAQ:

What does YoY mean?

YoY stands for Year-Over-Year. It's a financial term used to compare data from one period to the same period in the previous year, allowing for trend analysis and growth assessment over time.

What is an example of year on year?

An example of YoY would be comparing a company's Q2 2024 revenue ($150,000) to its Q2 2023 revenue ($120,000), showing a 25% YoY increase. This indicates significant revenue growth for the company in that specific quarter compared to the same quarter the previous year.

How to calculate YoY growth percentage in Excel?

You can calculate YoY growth percentage in Excel using the formula:YoY % Change = [(Current Period Value - Prior Year Period Value) / Prior Year Period Value] x 100. Simply plug in the values for the current and prior year periods into the corresponding cells in Excel, and the formula will calculate the YoY percentage change for you.