QOQ Vs. YOY

Financial results are generally published for a quarter- a period of 3 months.

A financial year has 4 quarters. It is important to know that in few countries Financial year (FY) is different from the calendar year (CY).

In many countries like India financial year begins on the 1^st of April and closes on 31^st March.

So FY 12 or FY 2011 -2012 begins of 1^st April 2011 and closes on 31^st March 2012.

Quarter	Financial year	Calendar year
First Quarter (Q1)	1st April-30th June	1st  January-31st  March
Second Quarter (Q2)	1st July- 30th September	1st April-30th  June
Third Quarter (Q3)	1st October-31st December	1st July- 30th September
Fourth Quarter (Q4)	1st January- 31st March	1st October-31st December

Suppose in the financial year 2011-2012 company ABC posts the quarterly results for the second quarter i.e. for a period of 1^st July 2011- 30^th September 2011, when this result is compared with the first quarter i.e.  1^st April 2011-30^th June 2011, it is called QOQ (Quarter on Quarter) comparison.

On the other side when second quarter result  i.e. for a period of 1^st July 2011- 30^th September 2011 is compared with the corresponding quarter of the  previous financial year(FY) i.e. 1^st July 2010- 30^th September 2010, it is called YOY (year on year ) comparison.

QOQ comparison tells us how company performed against the previous quarter of the same financial year while YOY comparison is done with the corresponding quarter of the previous financial year.

Let’s understand this concept with L&T financial Holdings Ltd’s example-

Parameter	Quarter ending  31 Dec  2011	Quarter ending 30th Sep 2011	Quarter ending 31st  Dec 2010
Net profit	9361 crore	12424 crore	9088 crore

So L&TFH has given a negative 32 % QOQ return while the YOY return is 2.9%.

This means though L&TFH has slightly improved its Net Profit in comparison with the corresponding quarter of the previous year but returns are miserably deteriorated in comparison with the previous quarter of the same financial year.