What is YOY (Year Over Year) How to Calculate It?
What Is Year Over Year Growth?
A year over year is simply a means of calculating and comparing one period to the other period. It is basically referred to as financial comparison as it is done for a financial year by the companies to check their progress and where they stand today as compared to the previous year. Moreover, the comparison can also be made for a specific fixed time period say, monthly, quarterly, biannually, or annually, etc.
As every business person or entity is concerned about their business growth and profit, therefore they do compare and make use of year over year or YOY abbreviation. Even some business entity also does compare their profit and loss statements or their quarterly statements to make the comparison.
These comparisons are useful for the business entity as well as for the traders and lenders to know the position of the business.
YearOverYear Definition:
The YearOverYear means the comparison of previous year data to the current year data or the year 1 data to the year 2 data.
Why is YoY Used for Or What is the purpose of YOY?
The YOY is basically used by the business person or the companies who want to compare their progress or their profits or the growth of their business or company over a specific time frame.
YearOverYear or YOY Formula:
The formula used for the calculation of Year over year (YOY) can be stated as follows:
(((y2 y1))/ y1) * 100.
Where in the above formula:
 Y2 = year 2
 Y1 = year 1
How to Calculate YOY Growth?
For calculating the YOY growth you need, the previous year’s growth or data and this year’s growth or data.
Step 1: Subtract year 1 growth from the year 2 growth.
Step 2: You will get the total difference for the year.
 Note: If the difference is positive the this means there is profit or gain in the period or improvements from the previous year, but if the difference is negative then this shows that there is a deficit and the previous year’s performance was better than this year.
Step 3: Then you need to divide the difference obtained by 1st year.
Step 4: Now, apply the percentage to this or multiply it by 100 to get the percentage.
YearOverYear (YOY) Examples:
Example 1: The previous year or the Year 1 sales are noted as 245. And the current year or year 2 sales are noted as 545. Then calculate the YOY growth?
Given data:
 Year 1 sales = 245
 Year 1 sales =545
Applying the YOY growth formula, which is as follows:
(((y2 y1))/ y1) * 100.
Step1: Subtract ( Year 2 – Year 1 ) i.e. (545 – 245)
= (545 – 245)
= 300
Step 2: Divide 300 by 245
= 300 / 245
= 1.2244897959
Step 3: Multiply 1.2244897959 by 100
=1.2244897959 * 100
= 122.44897959 Percent
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So, the Percent Change or YOY growth is noticed as 122.44897959 {367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} from the previous year in sales or the YOY sales.
Example 2: The previous year or the Year 1 profits are noted as 300. And the current year or year 2 profits are noted as 120. Then calculate the YOY growth?
Given data:
 Year 1 sales = 300
 Year 1 sales =120
Applying the YOY growth formula,
(((y2 y1))/ y1) * 100.
 Step1: Subtract (120 – 300)
= (120 – 300)
= 180
 Step 2: Divide 180 by 300
= 180 / 300
= 0.6000000000
 Step 3: Multiply 0.6000000000 by 100
= 0.6000000000 * 100
= 60
So, the Percent Change is noticed as 60 Percent from the previous year’s profits. As, this figure is negative, or there is negative YOY it shows that the year 1 profit was more than year 2 profits.
Graph for YOY change ( in profits ):
Example 3: Now, taking up an example of the Quarter and calculating the YOY on a quarterly basis for the sales.
Given to us the following table:
Q1 
Q2  Q3  Q4  
2019  8 
5  9  12 
2020  12  4  8  21 
Solution: By applying the following YOY formula for each quarter to get the YOY sales as:
YoY = (This Year – Last Year) / Last Year
Q1 
Q2  Q3  Q4  
2019  8 
5  9  12 
2020  12  4  8  21 
YoY Change  50{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39}  20{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39}  11.11{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39}  75{367c01af22dc6c3a8611ff25983b0f0a247ed9fc1c45fd9103ad49b47a0c5f39} 
Calculation of YOY for Quarter 1:
 Step1: Subtract (12 – 8) which gives you: 4
= 12 – 8
= 4
 Step 2: Divide 4 / 8 which gives you: 0.5000000000
= 4 / 8
= 0.5000000000
 Step 3: Multiply 0.5000000000 * 100 = 50
= 0.5000000000 * 100
= 50
YOY Graph For quarter 1:
Calculation Of YOY for Quarter 2:
 Step1: Subtract (4 – 5) which gives you the output as: 1
= 4 – 5
= 1
 Step 2: Divide 1 / 5 which gives you the output as: 0.2000000000
= 1 / 5
=0.2000000000
 Step 3: Multiply 0.2000000000 * 100 = 20
 = 0.2000000000 * 100
 = 20
YOY Graph For quarter 2:
Calculation of YOY for Quarter 3:
 Step1: Subtract (8 – 9) which gives you the output as: 1
= 8 – 9
= 1
 Step 2: Divide 1 / 9 which gives you the output as: 0.1111111111
= 1 / 9
= 0.1111111111
 Step 3: Multiply 0.1111111111 * 100 = 11.11111111
= 0.1111111111 * 100
= 11.11111111
YOY Graph For quarter 3:
Calculation of YOY for Quarter 4:
 Step1: Subtract (21 – 12) which gives you the output as: 9
= 21 – 12
= 9
 Step 2: Divide 9 / 12 which gives you the output as: 0.7500000000
= 9 / 12
= 0.7500000000
 Step 3: Multiply 0.7500000000 * 100 = 75
= 0.7500000000 * 100
= 75
YOY Graph For quarter 4:
Example 4: Now, taking up an example of the Quarter and calculating the YOY on a quarterly basis for the revenue.
Given to us the following table:
Q1 
Q2  Q3  Q4  
2019  $9,000 
$15,000  $10,000  $14,000 
2020  $12,000  $18,000  $8,000  $20,000 
Solution: By applying the following YOY formula for each quarter, we will calculate the YOY revenue as:
YoY = (This Year – Last Year) / Last Year
Q1 
Q2  Q3  Q4  
2019  $9,000 
$15,000  $10,000  $14,000 
2020  $12,000  $18,000  $8,000  $20,000 
YoY Change  33.33 Percent  20 Percent  25 Percent  67 Percent 
Calculation of YOY for Quarter 1:
 Step1: Subtract (12000 – 9000) which gives you the output as: 3000
= 12000 – 9000
= 3000
 Step 2: Divide 3000 / 9000 which gives you the output as: 0.3333333333
= 3000 / 9000
= 0.3333333333
 Step 3: Multiply 0.3333333333 * 100 = 33.33333333
= 0.3333333333 * 100
= 33.33333333
YOY Graph For quarter 1:
Calculation Of YOY for Quarter 2:
 Step1: Subtract (18000 – 15000) which gives you the output as: 3000
= 18000 – 15000
= 3000
 Step 2: Divide 3000 / 15000 which gives you the output as: 0.2000000000
= 3000 / 15000
= 0.2000000000
 Step 3: Multiply 0.2000000000 * 100 = 20
= 0.2000000000 * 100
= 20
YOY Graph For quarter 2:
Calculation of YOY for Quarter 3:
 Step1: Subtract (8000 – 10000) which gives you: 2000
= 8000 – 10000
= 2000
 Step 2: Divide 2000 / 10000 which gives you the output as: 0.2000000000
= 2000 / 10000
= 0.2000000000
 Step 3: Multiply 0.2000000000 * 100 = 20
= 0.2000000000 * 100
= 20
YOY Graph For quarter 3:
Calculation of YOY for Quarter 4:
 Step1: Subtract (20000 – 14000) which gives you: 6000
= 20000 14000
= 6000
 Step 2: Divide 6000 / 14000 which gives you: 0.4285714285
= 6000 / 14000
= 0.4285714285
 Step 3: Multiply 0.4285714285 * 100 = 42.85714285
=0.4285714285 * 100
= 42.85714285
YOY Graph For quarter 4:
Common YoY financial metrics
The basis of comparison in YOY can be based on the following:
 Sales revenue: It shows up the net increase or decrease in sales as compared to the previous year.
 Cost of Goods Sold (COGS): It shows up how many goods were sold in the previous year as compared to the current year.
 Selling General & Administrative expense (SG&A): This shows up the expenses incurred difference from the previous as well as the current year.
 Earnings Before Interest Taxes Depreciation and Amortization (EBITDA): The difference prevalent in the earnings which were before tax and depreciation as well as the amortization expenses are compared with YOY growth.
 Net Income: The net income incurred in the previous year and the current year is compared.
 Earnings Per Share (EPS): The cost per share is compared with YOY growth.
Alternatives to Year Over Year YOY Growth
YOY is not the only timeseries measurement used for the comparison of the business or the companies. There also exits some other timeseries measurement terms used by the companies and business, some of which are as follows:
 Month to date (MTD): The Month to date (MTD) measures the performance from the beginning of the current month to the current date or the present date, but it should be noted that this method does not include today’s date.
 Quarter to date (QTD): The Quarter to date (QTD) measures the performance from the beginning of the quarter to the current date or the present date, but it should be noted that this method does not include today’s date.
 Month over the month (MoM): The Month over the month (MoM) depicts or shows the difference in the current as well as the previous month, which can be specific to the use say sales, or revenue, or profits, etc.
Advantages of Year Over Year (YOY):
 It is easy to calculate and compare the values.
 It compares the net results.
 There is hardly any calculator or spreadsheet needed for this calculation.
 The results are depicted in percentage which is easy to note down the growth.
Disadvantages of Year Over Year (YOY):
 Some seasonal fluctuations are not shown up.
 The results are some times shown as negative, which is not relevant as such.
Conclusion:
Year Over Year acts as a financial tool to measure the growth or the performance of the business or the company based on the data given. This comparison can be made annually, quarterly, or biannually air according to the specific period desired. A positive YOY means growth whereas a negative YOY depicts that current year growth is higher than the previous year’s growth.
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