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Year-to-Date or YTD is an important time-based metric in accounting and bookkeeping. In this article we’ll walk through what it means, when and how it’s used, and how to place YTD metrics in context of other useful time-based metrics.
What does year-to-date mean?
Year-to-date (YTD) means the total of something from the first day of the year through the current date. It is a time-based measurement used in financial management and investment. Most North American companies take year-to-date to mean the calendar year, which is also aligned with their fiscal year (starting January 1).
However, some companies do not peg their fiscal year to the calendar year for accounting purposes, so be careful to check which fiscal year you’re using before preparing any YTD information. Some companies will choose different fiscal years to align better with seasonal business trends, or lumpy supply and demand.
Who uses year-to-date?
Business owners, accountants, bookkeepers, and investors all use YTD to compare current year performance to other periods (typically the previous year). Year-to-date is usually used as a quick way to check in on revenue, income, or dividends for the beginning of the year or any other period. Here are some other groups or entities that use year-to-date as a metric.
Global financial markets
Stock markets also provide YTD information to help investors, fund managers, listed investment companies and wider markets to understand performance. For example, you can quickly check the performance of the S&P 500 using a whole range of different time-based measures, including YTD.
Again, YTD is a relatively meaningless metric at the very early stages of a fiscal year—but its utility grows as the year develops.
Corporate accounting teams
Management can ask for YTD details as a quick check-up on the company’s financial health, rather than waiting until the end of a quarter to assess financial statements. YTD information may be particularly useful if the business is going through a period of atypical activity. That could be a merger or acquisition, a fundraise, or some form of external crisis. In these situations, YTD information may help the business quickly see how different their YTD spend, earnings, or vendor costs are compared to the same time frame the year before.
Financial Planning and Analysis teams
FP&A teams need to budget and forecast, so they may also use YTD information to uniform their data gathering and decision making. For example, a financial analyst may notice that the business’s YTD spending on a particular vendor or department has already exceeded last year’s total. This could be a sign that the business needs to find more efficient ways to better control their spend.
HR and payroll teams
HR and payroll teams often use YTD reporting to understand how much the company has spent from the start of the current fiscal year up until now on gross pay, net pay, deductions, benefits, taxes, and expense reimbursement. A HRIS system can also help payroll teams and HR managers to view YTD details on hours worked, leave days taken, and leave accrued.
How do businesses use year-to-date?
In many ways, businesses use year-to-date the same way they use other metrics, such as:
- Week-on-week (WoW): The week-on-week metric is used by large and small businesses to compare one week of data to the previous week. Any seven-day period can be used to compare against the one before it and isn’t limited to the current one. For example, a 5% week-on-week expense growth means that expenses have increased by 5% this week compared to the last. Businesses can use WoW to analyze short-run metrics to keep track of task progress and employee performance.
- Month-to-date (MtD): month-to-date is a metric that is used to track progress from the start of the month to the current date, but not including it. This metric is specifically used to track progress. Businesses can use MTD to see results on a particular campaign or the progress of an activity.
- Month-on-month (MoM): The month-on-month metric shows the change in the value of a particular KPI over the period of one month. This is an essential metric because businesses need to assess their KPIs before the quarter is up and often look at monthly changes to evaluate their goals.
- Year-on-year (YoY): The year-on-year metric measures growth in a metric over the course of one year. This is the most used time-period metric, as companies often compare their current KPIs with that of last year. An advantage of using YoY is that it takes seasonality into account.
However, note that time-period measures can be misleading if not much of the time-period has yet elapsed.
How to calculate year-to-date
YTD measurement is more sensitive to early changes than late changes. It’s a measurement that’s perhaps best used alongside others, rather than in isolation. For example, contrast YTD measurement with year-ending, quarter-on-quarter (QoQ), and custom date ranges if needed.
Here’s a simple example of YTD measurement: Let’s say you want to do this for your business's profits. Modern financial management software will help you rapidly pull out this information at the click of a button, but you can also use spreadsheets and formulas to get these figures.
Calculating YTD profit
Your profit & loss statement shows your total revenue, expenses, and profits or losses for any specific period of time. Most income statements are assessed over a month, quarter, or year, but you can look at YTD information on your P&L too.
Let’s say your fiscal year starts on January 1st like many businesses in the US. And let’s say today is April 2nd. The P&L shows income of $670,539 and expenses of $340,708. By subtracting the latter from the former, you get your YTD profit: $320,831.
Calculating YTD stock returns
You can also do this with stock prices:
- Subtract its price at the start date of the fiscal year from its most recent value at close
- Divide the difference by the value on your fiscal year start date
- Then multiply your result by 100 to get that as a percentage
One thing to remember when calculating YTD information is to always exclude the current day, because it is still underway.
Get YTD spending and saving insights
Using time-period measurements like YTD, QoQ, and MtD give financial planning and analysis teams and senior leaders shaping financial management strategy an array of ways to look at the businesses financial health.
However, the days of relying on spreadsheets to calculate these time-period measurements are coming to an end. Accounting, bookkeeping and spend management software building now make time-period measurement fast and efficient. With Ramp, you can get a high-level view of the company’s spend across any time frame.
The simplest way to calculate year-to-date is often to add up monthly or quarterly totals for the current year. So, if you wanted to know your year-to-date spend on office supplies, you could add up how much you’ve spent each month this year on office supplies. But there are many ways to calculate year-to-date and the best formula really depends on the item you want to know year-to-date for, whether it’s YTD earnings or YTD returns on your stock portfolio.
To create a year-to-date profit and loss statement, you must gather all of your income, expenses, and transaction data for the current year and then calculate your P&L from the beginning of the year through the current date. Learn more about how to create a profit and loss statement.
Most pay stubs show YTD earnings but you can also calculate this sum by adding up all of the payments you have received starting with the beginning of the calendar year through your most recent payment. So, if you receive $1,500 every two weeks and it is now the end of May, you could multiply $1,500 by 10 to get your YTD earnings.