YY year on year Definition & Meaning | Fundamental Analysis | CSIMarket
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Glossary

YY year on year

Fundamental Analysis

Year on year (YoY) is a common measure used in fundamental analysis to analyze the performance of a company over a period of time. By comparing a company*s financial performance from one year to the next, investors can gain insights into the company*s growth potential, profitability, and overall health. YoY is a simple yet effective measure that can be used to track changes in key financial metrics such as revenue, earnings, and margins, among others.

To calculate YoY growth, investors typically take the current year*s financial performance and subtract the previous year*s performance to get the percentage change. This percentage can then be used to evaluate the company*s performance relative to previous years or to compare it with competitors. For example, if a company had revenues of $100 million in 2020 and $120 million in 2021, the YoY revenue growth rate would be:

(YoY growth rate) = ((2021 revenue - 2020 revenue) / 2020 revenue) n 100%

= ((120 - 100) / 100) n 100% = 20%

This means that the company grew its revenues by 20% year on year.

YoY growth rates can also be used to project future performance and to detect trends in a company*s financial performance. For example, if a company consistently shows high YoY revenue growth rates, it may be a sign of a healthy business that is poised for further growth. Alternatively, if a company*s YoY revenue growth rates are shrinking over time, it may be a sign of declining or stagnant revenue growth.

In summary, YoY is an important metric used by investors in fundamental analysis to evaluate a company*s performance over a period of time. By calculating the percentage change in key financial metrics from one year to the next, investors can gain valuable insights into a company*s growth potential, profitability, and overall health.




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