MoM, QoQ, YoY

MoM (Month-over-Month) are changes in levels expressed with respect to the previous month. MoM measures tend to be more volatile as they are more affected by one-time events (e.g. stock market crash, natural disasters, months with many working days, months with many people on vacation, etc.).

==> we compare the average of Month X with Month Y to calculate the MoM change (e.g., average of June with July and report in August, like the Consumer Price Index or CPI)
Month X – Month Y numbers
_______________________ x 100 = Percentage Growth
Month X
QoQ (Quarter-over-Quarter) figures calculate change compared to the previous financial quarter, such as comparing Q2 with Q1 of this year. Although many figures are released monthly, many important indicators are released on a quarterly basis, such as GDP (gross domestic product). QoQ will tend to be more volatile than Year-over-Year figures but less volatile than MoM numbers.

==> we compare the average of Financial Quarter X with Financial Quarter Y to calculate the QoQ change (e.g., average of Quarter 1 2009 with the average of Quarter 2 2009)
Quarter X – Quarter Y numbers
_______________________ x 100 = Percentage Growth
Quarter X number
YoY (Year-over-Year) figures report the changes in a year’s worth of data, in comparison with the previous year. YoY incorporates more data and thus is able to give a better long-term picture of the underlying report figure.

==> we compare the average of Year X with Year Y to calculate the YoY change (e.g., average of June 2008 with the average of June 09)
Year X – Year Y numbers
_______________________ x 100 = Percentage Growth
Year X number
Compound annual growth rate
Compound annual growth rate (CAGR) is calculated as follows:

CAGR=((4th Year/1st year)^(1/3))-1
Means CAGR=((4th Year/1st year)RAISED TO(1/3))-1
or CAGR=((4th Year/1st year)TO THE POWER OF(1/3))-1
Bottom line
Whatever trend report you may be looking at, make sure you know which period is being compared (year, quarter, month, week, day). Accordingly, a blog’s performance can drop 0.2 percent in July (Month-over-Month), yet still have increased 4.1 percent in the 12-month period ending in July (Year-over-Year).

MoM figures such as the CPI (Consumer Price Inflation) are released with a two-week lag so people may not know until how this month’s inflation affects their pocketbook until the middle of the next month. Finally, newsies, investors, budget people and top management are after the latest monthly and 12-month rates.