When buying or selling a business, numbers tell a story.
But not just any numbers, the ones that show progress.
That’s where Year over Year (YoY) comes in.
It’s a simple way to compare how a company performs this year versus last year.
And in mergers and acquisitions (M&A), it can make or break a deal.
What “Year over Year” Really Means
Year over Year, often shortened to YoY, is one of the simplest yet most revealing measures in business.
It shows how a company’s results this year compare to last year, helping you see real growth rather than short-term spikes.
Unlike month-to-month or quarter-to-quarter numbers, YoY smooths out short-term fluctuations.
It gives a clearer picture of long-term performance.
For example, a company might have a strong sales month due to a big promotion, but if its YoY numbers are flat, it means overall growth isn’t improving.
In M&A, YoY helps both buyers and sellers cut through the noise.
Buyers use YoY data to understand whether a company’s success is steady or seasonal.
Sellers use it to prove that their growth isn’t a one-time event, it’s a pattern that shows stability and scalability.
A strong YoY trend signals that a business is moving in the right direction, while inconsistent YoY numbers may hint at deeper issues that need attention before selling.
For advisors, YoY trends form the backbone of valuation discussions, negotiation strategies, and deal confidence.
Why “Year over Year” Is So Important in M&A
YoY growth is one of the first things investors and buyers look at when evaluating a business.
It instantly shows whether the company is expanding, maintaining, or declining.
Strong and consistent YoY growth tells buyers that the business is stable and well-managed.
It also reassures them that what they see on paper reflects real progress, not just temporary luck.
For sellers, solid YoY results are like proof of credibility.
They make your business easier to trust, and easier to sell for a premium.
A company showing 10–20% YoY growth consistently over several years can often command a higher valuation because it demonstrates repeatable success.
On the other hand, inconsistent or negative YoY performance can raise concerns.
But it doesn’t have to ruin a deal.
Skilled advisors can identify what caused the dip, maybe a one-time investment or a temporary market shift, and help position it in a positive light.
In M&A, YoY isn’t just a number, it’s a signal of direction, discipline, and dependability.
It’s what tells buyers, “This business knows how to grow.”
What to Look for When Buying a Business
When you’re buying a business, YoY data acts like a roadmap showing where the company has been, and where it’s heading.
It helps you see beyond surface numbers to understand real performance trends.
Start by looking at YoY revenue and profit growth.
Are they both increasing steadily, or does one lag behind the other?
Consistent YoY revenue with flat profits might signal rising costs or operational inefficiencies.
Rapid profit growth with flat revenue, on the other hand, could mean smart cost control or a recent restructuring.
It’s also important to look at YoY customer and employee trends.
Are customer numbers increasing every year?
Are employees staying longer or leaving more often?
These YoY patterns often tell more about business health than financials alone.
Another key point: watch for YoY seasonality.
A business that peaks only during certain months might need stronger cash flow management.
Don’t mistake seasonal highs for sustainable growth.
A good M&A advisor will help you separate predictable seasonality from risky volatility.
Finally, compare YoY growth to the industry average.
A company growing slower than its competitors may have untapped potential, or hidden issues to address before buying.
How to Grow Your YoY Numbers Before Selling
If you’re planning to sell, improving your YoY numbers should be a top priority.
Buyers want proof of steady, predictable growth, not short-term spikes.
Strong YoY results show that your business performs well regardless of market shifts or seasonal trends.
Start by identifying your biggest growth drivers.
Look at which products, services, or clients contribute most to revenue each year.
Double down on what’s working, and phase out what’s not.
Even a small 5–10% YoY increase in key areas can have a major impact on your company’s valuation.
Next, focus on operational efficiency. Streamline workflows, negotiate better supplier terms, and automate repetitive tasks. Higher profit margins, even with modest YoY revenue growth, send a strong message to buyers that your business is efficient and scalable.
You can also improve YoY numbers by building recurring revenue.
Subscription models, service contracts, or retainers create predictable income, something every buyer values highly.
Predictability builds confidence, and confidence boosts valuation.
Finally, make sure your financials clearly show your YoY progress.
Document every improvement, and work with advisors who can present your numbers in the most compelling way.
Final Thoughts
YoY performance might look like a simple comparison, but in mergers and acquisitions, it’s one of the clearest signals of a company’s true strength.
It reflects not just what a business earned, but how well it adapts, grows, and sustains success over time.
For sellers, strong YoY growth tells a compelling story.
It shows buyers that your business doesn’t rely on one lucky year, it thrives year after year.
It proves resilience, good management, and long-term potential.
These are the qualities that make investors pay attention, and pay more.
For buyers, YoY trends reveal patterns that one-off numbers can’t.
They help you spot consistency, stability, and areas where improvement could unlock huge returns after the acquisition.
A company with a flat YoY trend but solid fundamentals might be a goldmine waiting for the right strategy.
At Elkridge Advisors, we know that YoY numbers are more than lines on a spreadsheet, they’re the heartbeat of a business.
Our team helps clients uncover what those numbers really mean, strengthen them before a sale, or analyze them before a purchase.
Whether you’re selling your company or looking for your next great buy, understanding your YoY growth is the first step toward making smarter, more profitable decisions.
