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Year to date (YTD): What is it and how to calculate it

How can you analyse business trends before the fiscal year has ended? A year to date, or YTD, comparison is useful for this and many other purposes. Here’s what you need to know about the year to date meaning, and how it’s used in accounting.

What does year to date mean?

Year to date (YTD) is a term covering the period between the beginning of the year and the present. It can apply to either calendar or fiscal years. Your fiscal year might not necessarily begin on 1st January but no matter the dates, YTD covers the first day of the year in question up until the day of calculation.

How is year to date used?

We’ve now discussed the year to date meaning, but why is it useful in business? YTD information might be used to look at a company’s earnings, net pay, or investment returns, even though you don’t have the full years’ worth of data just yet. Management can ask for the YTD details as a quick check-up on the company’s interim financial health, rather than waiting until the end of the year.

It’s also useful for comparison purposes. You can compare current YTD financial details to historical statements covering the same period, such as the first financial quarter of the year. One thing to keep in mind, whether you’re analysing trends or measuring performance, is that different companies might have different fiscal year starting dates. If you compare YTD information between two companies with different fiscal years, the analysis will be skewed.

Year to date example

Here’s a quick example to illustrate how year to date is used to calculate a YTD revenue. Imagine that Company XYZ uses the calendar year for its financial statements, meaning it begins on the 1st of January. Today is the 31st of March, and so far, Company XYZ has recorded the following monthly revenues.

  • January: $5,000,000

  • February: $2,500,000

  • March: $2,500,000

You simply add the revenue from all three months together to determine that the YTD revenue is $10,000,000. Company XYZ can then compare this figure to the first three months of any other fiscal year for a quick comparison.

How to calculate year to date

The best year to date calculator will depend on how you’re using this concept. The example above looks at YTD revenue, which is the sum of all revenues between the first and last date of the period in question.

YTD returns

Another common application of YTD is in calculating profit made by any investment from the first date of the current year. This is called the YTD return, and it’s used by investors to assess portfolio performance. A year to date calculator for return on investment uses the following equation:

YTD ROI = (Current Investment Value – First Day of Year Value) / First Day of Year Value

Multiply the result by 100, and you’ll have a percentage for YTD comparison.

YTD earnings

Like YTD revenue, you can calculate an individual’s year to date earnings by adding together all pay received from the first date of the fiscal year up until today. This typically includes income tax payments as well as national insurance withholdings and benefits.

For independent contractors, you can use the following formula:

YTD Earnings = Revenue – Expenses

Add years to date in Excel

If you’re using Excel to keep track of your business’s finances, you should use the DATE function. You can add years to date in Excel by using the following formula:

DATE (YEAR(date)+years,MONTH(date),DAY(date))

Whether you’re calculating returns on your investment, keeping track of company earnings, or analysing any other financial figures, year to date is a useful measurement to keep in mind.

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