All about Money

What is Quarter earnings, Y-o-Y, and Q-on-Q?

While reading financial statements like profit and loss, or revenue, you might encounter some of these terms. Let’s understand what they mean.

Revenue

Anil has a shop that sells samosas. He sells 100 samosas a day at 10 rs per samosa. How much money does he make from sales? 100 *10 = 1000 rs.

The total money that a company makes is called its revenue.

Quarter

How many months does a year have? 12. These 12 months are divided into 4 quarters (qua means 4) of 3 months each. This is purely for convenience.

Since the financial year is typically from April – March in India, for India, the quarters are: Jan-Feb-March (JFM), April-May-June (AMJ), July-August-September (JAS), October-Nov-Dec(OND).

Y-on-Y

Y-o-Y or Y-On-Y simply means Year on Year.

Let’s go back to Anil’s Samosa shop. If, in 2020, he sold, on average, 100 samosas a day, his annual revenue would be 1000 * 365 = 3,65,000.

Now, let’s suppose that in 2021, he sold 110 samosas on average, every day.

This makes his annual revenue 1100 * 365 = 4,01,500.

This is 10% higher than the previous year.

So, his Y-o-Y growth in revenue is 10%.

That’s all it means.

Q-on-Q

Just like year on year means over the previous year, Q-on-Q means this quarter’s earnings over the previous quarter.

Suppose Anil sells 120 samosas a day during the winter months of Jan-Feb-March. This makes his quarterly earnings 120 * (31+28+31) * 10 = 1,08,000.

Now, in April-May-June, he only sells 95 samosas a day.

This makes his revenue 95 * (30+31+30) * 10 = 86,450.

Now, his revenue this quarter is lower than last quarter, so we say that his Q-o-Q revenue has fallen (108000-86450) / 108000 *100 = 19.95% or almost 20%.

One Reply to “What is Quarter earnings, Y-o-Y, and Q-on-Q?”

Comments are closed.