A method of evaluating two or more measured events that compares the results
of measurement at one time period with those from another time period (or series
of time periods), on an annualized basis. Year-on-year comparisons are a popular
way to evaluate the performance of investments. Any measurable events that recur
annually can be compared on a year-on-year basis - from annual performance, to
quarterly performance, to daily performance.
Year-on-year performance is frequently used by investors seeking to gauge
whether a company's financial performance is improving or worsening. For
example, a business may report that its revenues have increased for the third
quarter on a year-on-year basis for the last three years. This means that
revenues at that company in the third quarter of the third year were higher than
revenues in the third quarter in the second year, which were higher than
revenues in the third quarter of the first year.
As another example, a mutual fund that returned 50% last year may have a
year-on-year return of 12%, as the year-on-year return takes into account each
annual return since the fund's inception.
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