What is Quarter Over Quarter?
Quarter over quarter refers to the mathematical process of comparing one quarter of data to the previous quarter. In business, note that the start and end dates of quarters can vary, though they are generally three months, or 90 days, long.
How Does Quarter Over Quarter Work?
Let's assume Company XYZ's first quarter year begins on January 1 and that its second quarter begins on April 1. During this time, Company XYZ recorded the following for the last two quarters:
By comparing the Q1 2012 revenues to Q2 2012 revenues, we can calculate that Company XYZ was up 50% quarter over quarter.
Why Does Quarter Over Quarter Matter?
Quarter-over-quarter information is useful in looking for trends or measuring performance against goals. Remember, though, that comparing quarter-over-quarter information among companies with different quarter start dates can distort an analysis: The time included may vary and seasonal factors may become skewed. It is also important to remember that the extra day in leap years may distort comparisons.