What is YOY?
Year-on-year (YOY) is a popular financial comparison for comparing two or more measurable events on an annualized basis.
Year-over-year (YOY)—also known as year-on-year—is a popular financial comparison for comparing two or more measurable events on an annualized basis.
YOY performance can be used to determine whether a company’s financial performance is improving, stable, or declining. For example, you may read in financial reports that a specific company’s revenues increased year over year in the third quarter for the last three years.
As it compares one time perios with the another, it enables an annualised comparison, for example, of third-quarter earnings this year versus third-quarter earnings the previous year. It is commonly used to compare a company’s profit or revenue growth, but it can also be used to describe yearly changes in an economy’s money supply, GDP, and other economic measurements.
Formula used to calculate the year-over-year (YoY) growth rate
Year over Year Growth (YoY) = (Current Period Value ÷ Prior Period Value) – 1