Definition: Compares a time period, (usually a month or a quarter) against the same time period last year. It is a more effective way of looking at performance. If you are doing better than last month, for example, but worse than this time last year, then you might be lulled into thinking you were improving when in fact you were not.
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.
Whenever you are looking at a trend report, make sure you know whether it is being compared to the last period (quarter, month, week, day) or year-over-year.
Also Known As: Y-O-Y, YOY, year over year, year to year
Examples: Annual GDP, like any annual report, is always looked at year-over-year.
