Year to Date (YTD): What It Means and How to Use It What Is Year to Date?
Year to date (YTD) refers to the period of time beginning the first day of the current calendar year or fiscal year up to the current date. YTD information is useful for analyzing business trends over time or comparing performance data to competitors or peers in the same industry. The acronym is often seen in references to investment returns, earnings, and net pay.
Key Takeaways YTD refers to a period of time beginning the first day of the current calendar year or fiscal year up to the current date.Some governmental agencies and organizations have fiscal years that begin on a date other than the first of January.YTD analysis is useful for managers when reviewing interim financial statements in comparison to historical YTD financial statements.
Investopedia / Matthew Collins
Understanding Year to Date
If someone uses YTD for a calendar year reference, they mean the period of time from Jan. 1 of the current year through the current date. If they use YTD for a fiscal year reference, they mean the period of time between the first day of the fiscal year in question and the current date.
A fiscal year is a period of time lasting one year but not necessarily beginning on the first of January. It is used by governments, corporations, and other organizations for accounting and external audit purposes.
For example, the federal government observes its fiscal year from Oct. 1 to Sept. 30, and Microsoft’s fiscal year is from July 1 to June 30. It is common for nonprofit organizations to have a fiscal year of July 1 to June 30.
Current YTD financial statements are routinely analyzed against historical YTD financial statements for the equivalent time period. For example, if a company’s fiscal year begins on July 1, a three-month YTD financial statement would run through Sept. 30 and would be compared to previous years’ July through September statements.
This comparison can help to identify seasonal trends or abnormalities.
YTD financial information is useful for management as it is a good way to check in on the financial health of a company on an interim basis rather than waiting until the end of the fiscal year.
Types of Year to Date Year to Date Return
YTD return refers to the amount of profit made by an investment since the first day of the current year. Investors and analysts use YTD return information to assess the performance of investments and portfolios.
To calculate a YTD return on investment, subtract its value on the first day of the current year from its current value. Then, divide the difference by the value on the first day, and multiply the product by 100 to convert it to a percentage. For example, if a portfolio was worth $100,000 on Jan. 1, and it is worth $150,000 today, its YTD return is 50%.
Year to Date Earnings
YTD earnings refer to the amount of money an individual has earned from Jan. 1 to the current date. This amount typically appears on an employee’s pay stub, along with information about Medicare and Social Security withholdings and income tax payments.
YTD earnings may also describe the amount of money an independent contractor or business has earned since the beginning of the year. This amount consists of revenue minus expenses. Small-business owners use YTD earnings to track financial goals and estimate quarterly tax payments.
Year to Date Net Pay
Net pay is the difference between employee earnings and the withholdings from those earnings. To calculate net pay, employees subtract the tax and other withholdings from their gross pay. YTD net pay appears on many paycheck stubs, and this figure includes all of the money earned since Jan. 1 of the current year minus all of the tax and other benefit amounts withheld.
Month to Date vs. Year to Date
Month to date (MTD) refers to the period of time between the 1st of the current month and the last complete business day before the current date. Typically, MTD does not include the current date because business may not have ended for that day.
For example, if today’s date is Aug. 21, 2021, MTD refers to the period of time from Aug. 1, 2021, to Aug. 20, 2021. This metric is used in similar ways as YTD metrics. For example, business owners, investors, and individuals use MTD data to analyze their income, business earnings, and investment returns for the month so far.
Year to Date Formula and Calculation
The specific formula for determining a year to date figure is:
Year to Date = ( Value as of a specific date Value at the start of the year ) − 1 begin{aligned}text{Year to Date} = left(frac{text{Value as of a specific date}}{text{Value at the start of the year}}right) – 1end{aligned} Year to Date=(Value at the start of the yearValue as of a specific date)−1
Then multiply the result by 100 to obtain a percentage.
Some YTD calculations can be made with simple addition. For example, if a business wishes to calculate its YTD sales, it would add up the sales figures for every budget period since the beginning of the fiscal or calendar year.
If you want to verify your YTD salary, you would add up the gross pay from every paycheck since the start of the year.
Annualizing Year to Date Yield
The math is more complicated for interest or yield figures, which are often represented in terms of annual percentage rates. Annualizing a yield allows investors to compare returns over different time periods. If your portfolio is up 4% and it’s now June, it may be hard to determine if your portfolio is on track to beat last year’s 8% returns.
The first step to annualizing yields is to divide the current value by the initial value at the beginning of the year. This gives you a fraction representing YTD growth. Next, raise that fraction to the power of 12 divided by the number of months that have passed. Subtract 1 and multiply the result by 100 to get a percentage.
For example, suppose your portfolio started the year at $1,000 and it currently has a value of $1,030 on Sept. 30. Divide $1,030 by $1,000 to get 1.03, and raise that to the power of 1.33 (12/9) to get 1.04. Thus, your portfolio is on track for an annualized 4% growth.
Example of Year to Date Calculation
Let’s say that you are conducting one of your periodic reviews of your investment portfolio. You’d like to calculate your YTD return to gauge where things stand.
Start by determining the value of your account at the start of the year. For this example, we’ll say that figure is $125,000.
Six months later, as of the the close of markets yesterday, the value of your portfolio had grown to $137,000. That’s good news. You know that your return is positive, but what’s the actual YTD figure?
Using the YTD formula above, you can calculate your return:
Year to date = (value as of a specific date ÷ value at the start of the year) – 1
Year to date = (137,000 ÷ 125,000) – 1]
Year to date = 1.096 – 1
Year to date = 0.096. To transform the decimal to a percentage, multiply by 100.
Year to date = 9.6%.
In six months, your portfolio has achieved a YTD return of 9.6%.
What Does Year to Date Mean on a Pay Stub?
On a pay stub, your YTD figure shows the total of your wages or earnings from the start of the current calendar year up to and including the most recent pay period. Most pay stubs show a running total of YTD earnings that includes gross wages, net pay, or both. They may also provide a YTD tally of your FICA taxes, income taxes, and other deductions.
How Do You Calculate Year to Date Returns?
Consider an investor who bought shares in a company on January 1 at $200 per share. In March, they are worth $202. Year to date equals ($202 ÷ $200) – 1, or .01. Then multiply this by 100 to arrive at 1%. The next step is to annualize these returns. Since the shares grew 1% in the first quarter of the year, that works out to an annualized growth of 4% (1% x 4).
What Is Month to Date?
Month to date is used to measure earnings, return, and income. It refers to the first of the month through the last business day before the current day (because the current business day may still be in progress).
The Bottom Line
Year to date represents one way to measure the return provided by a group of securities or an index. It can be a metric for a company’s financial progress. Rather than wait for end-of-year figures, a company can analyze performance trends throughout the year. YTD is a simple and straightforward way to assess progress over time.
