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Year-Over-Year (YoY): What It Is, Examples & Why It Matters

In finance, business, and investing, you are likely to come across the phrase “year-over-year” (abbreviated as YoY) quite often.

First, a quick definition of what year-over-year means.  Year-over-year compares results from one time period to the same time period in the previous year.

As an example, if a company reported earnings-per-share (or EPS for short) of $11.00 in fiscal 2018 and earnings-per-share of $10.00 in fiscal 2017, it would have achieved  year-over-year growth of 10% (The math: $11/$10 -1 = 0.1 = 10%).

What Is Year-Over-Year?

When a company reports its quarterly financial results, it will typically at least announce its revenue and earnings-per-share for the preceding three-month period.

These figures, along with a host of other quarterly numbers, are provided in the income statement, balance sheet, and statement of cash flow.

Aside from the quarterly financial statements, companies typically also discuss their results in a press release and a conference call with analysts who cover the stock.

In addition to providing the hard numbers, companies will also show the percentage increase or decrease across these metrics.

Why Is Year-Over-Year Important?

In many ways, a year-over-year comparison is more valuable for investors than a quarter-over-quarter, or “sequential” comparison.

Think of retailers such as department stores, which generate the vast majority of their annual profits in the fourth quarter, during the busy holiday shopping season.

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