What is YOY?
Year over Year (YOY) is a financial term used to compare performance and growth between two periods of time. It is commonly used to measure the performance of investments, companies, or markets. YOY is calculated by comparing one set of figures from one period of time to the same set of figures for the previous period. For example, if comparing sales figures for January 2020 with sales figures for January 2019, YOY would be calculated as the percentage difference in these numbers. This can help investors and business owners better understand their performance and growth over time.
YOY is similar to Month over Month (MOM) which also compares performance between two periods. However, MOM looks at shorter periods such as monthly or quarterly whereas YOY takes a longer view such as year-over-year or decade-over-decade. MOM can provide more granular insight into short-term changes while YOY gives a better picture of long-term trends and progress. By analyzing both MOM and YOY data points, investors and business owners can gain valuable insight into their performance and make informed decisions about their future strategies.
Example of YOY
A retailer comparing its online and high-street sales for the 31st week in 2020 and 2021. The offline sales dropped by 20%, but this decrease was balanced out by a 20% increase in online sales. Overall, the company sold 7% more units in Week #31 of year 2021 than the previous year.
