Year over year (YOY) - Definition

"Year-over-year" is a term that is used to describe the process of comparing the outcome of events that occurred in at least two different annual periods. This approach is often used to compare a recently closed period with one or more previous periods to determine if some type of progress or growth was realized. Making this type of comparison can often provide insight into what types of changes may be necessary to Advance the fortunes of a company in an upcoming period.

One of the advantages of year-over-year comparisons is that it automatically negates the effect of seasonality. For example, employment statistics take a dive each June because school lets out, and teachers are no longer employed. A month-to-month comparison would show an alarming drop-off if you didn't know to take the seasonality into account. Year-over-year comparisons would show a truer picture of the employment Trend.

A year-over-year Analysis can also be used by investors to evaluate the profitability of assets that are held in an investment portfolio. In this scenario, the idea is to compare the same periods within several different years to determine if those assets are performing at acceptable levels, or if there are signs of gradual decrease in returns. Identifying the reasons for any changes, positive or negative, from one period to the next can set the stage for making buying and selling decisions that will serve the interests of the investor to better advantage in the coming year, and hopefully lead to a more favorable year-over-year comparison in the future.

Terms near "Year over year (YOY)"

Year to Date (YTD)
Yield Curve
Yield on cost (YOC)
Yield to Call (YTC)
Yield to Maturity (YTM)
Yield to Worst (YTW)
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