Comparing Financial Figures
American companies traditionally judge their quarterly financial performance by comparing their latest quarter with the same quarter of the previous year. They refer to this as “year-over-year” (YTY) change. Sometimes companies also point out how the current quarter’s results compare to the previous quarter, what is termed as “sequential” change.
However, these two measurements can be quite different, as the chart below depicts for the years 2006 to Q2 2011.
As you can see, when compared using the YTY method, the Apple Retail segment has never reported a negative change (below the red line). However, if you use the sequential comparison method, there have been five times since 2006 when the current quarter’s revenues were less than the previous quarter.
Which is more accurate when reporting financial results, especially for a company that makes frequent product upgrades and introductions?
View the full charts and graphs for Apple Retail.