Definition of Year over Year

“Used to compare financial results with those of the exact period in the previous year.”

What is Year over Year (Y.o.Y)?

Year over year is a mathematical term in the financial world to compare data in a year to data from the previous year. The term Year over Year or Y.o.Y is often found in the financial statements of public companies whose shares have been released to the public or have made an Initial Public Offering (IPO) on the stock exchange.

It should be noted that each company has a different fiscal year. There are companies that start the fiscal year at the beginning of the year starting on January 1, but there are also companies that start the fiscal year in the middle of the year. This affects the company’s Year over Year reporting period.

Therefore, when comparing the performance of one company to another, it is necessary to re-check the fiscal year of the two companies. If they are different, this can lead to inaccurate analysis due to differences in the timing of trends throughout the year and there may also be differences in the number of days in the fiscal year.

Sample Year Over Year Report

For example, a Company named A started its fiscal year at the beginning of January, and it is currently February 25, 2019. The company’s financial statements are like this:

Revenue in 2017: IDR 5,000,000,-

Revenue in 2018: IDR 6,500,000,-

Amount of increase: IDR 1,500,000.-

Percentage increase: 30%

From the data above, by comparing Company A’s revenue in 2017 with revenue in 2018, the company experienced an increase in revenue of 30% Y.o.Y.

Year over Year Report Function

Performance calculation on a Year over Year basis has proven to be quite easy to calculate the company’s performance against the targets set at the beginning of the year. The performance report on a Year over Year basis will be used by investors as a consideration of whether to provide another investment or to withdraw the investment that has been given.

Year over Year in Mutual Funds

The term Year over Year is also often found in Mutual Funds to see the performance of a Mutual Fund portfolio in previous years. In this case, what is being compared is the Net Asset Value of the Mutual Fund portfolio. Even though a Mutual Fund has a good Year over Year growth, it is necessary to pay attention to the growth graph of the Mutual Fund, whether it is steadily increasing or has high volatility.

How is YOY calculated?

YOY calculations are straightforward & are usually expressed as a percentage. This would involve taking the current year’s value & dividing it by the previous year’s value and subtracting one: (this year) (previous year) – 1.

What is the difference between YOY & YTD?

YOY sees a change of 12 months. Year to Year (YTD) looks at the change relative to the starting of the year (usually January 1).