Year-over-year (YoY) growth compares a figure with the same period one year earlier: this year's second quarter with last year's second quarter, or this fiscal year with the last.
Formula
YoY growth = (this period − same period a year earlier) / |same period a year earlier|
The bars mean the absolute value: the earlier figure without its sign. Dividing by the absolute value keeps the direction right when the earlier figure is negative. An illustrative example: a net loss that narrows from −$100 million to −$50 million is growth of +50%, because the figure improved. Without the absolute value, the same change would show as −50%.
Listed shows growth with its sign: "+4.1% on the prior year".
Why the same quarter a year earlier
Many businesses are seasonal. A retailer's holiday quarter is larger than its spring quarter every year, so comparing one quarter with the one before it mostly measures the season. Comparing with the same quarter a year earlier removes most of that effect.
When it is not shown
- Either figure is not reported.
- The earlier figure is zero, so there is nothing to divide by.
Watch for
- Acquisitions. Growth that includes a business bought during the year is not the same as growth from the existing business. MD&A usually separates them.
- 53 week years. An extra week in one year inflates that year's growth and depresses the next.
- Restatements. Listed uses the latest reported figure for each period, which may differ from what was first reported.