YoY stands for year over year. YoY is one of the most commonly used financial comparison used to compare two or more events for two or more periods. For example, we can compare sales for November 2020 with the sales for November 2019.
There are several things that need to be taken care of while using the YoY convention. For example, yoy is way different from QoQ (Quarter over Quarter) and MoM (Month over month). In QoQ what we are doing is we are comparing one quarter with another quarter for the same period. For example, if we are comparing quarter 2 of 2020 with quarter 1 of 2020, it is what we call QoQ analysis.
But, if we are comparing Quarter 1 of current year i.e. 2020 with Quarter 1 of previous year, then it’ll be called as YoY analysis. I hope the difference is clear now.
The same is the case with MoM analysis. In MoM what we are doing is we are comparing one Month with another Month for the same period. For example, if we are comparing November 2020 with October 2020, it is what we call MoM analysis.
But, if we are comparing November of current year i.e. 2020 with November of previous year, that is November 2019, then it’ll be called as YoY analysis.
More about YoY:
Year-Over-Year is a method of comparison between two or more events on an annual or yearly basis. There are two conditions that must be fulfilled:
The events (that you are going to compare) should be measurable (As you know we how we can compare events if they are non-measurable)
The analysis should be made on yearly basis. (As the name suggests it’s a year over year analysis.).