What is Year to Date (YTD)?

Definition: Year-to-date (YTD) is the period between the first day of the calendar year and the current date. It is generally used for the calculation of investment returns on a security or a firm’s income to the current date.

What Does Year-to-Date Mean?

What is the definition of year to date? Year-to-date is widely used by financial analysts to provide details about a firm’s performance during a specified period or to compare the return of a portfolio during a specified period. By calculating YTD results, managers can perform a comparison between the firm’s current performance and the performance of past years.

For instance, the fiscal year for most companies is on January 1. The YTD results for company A to the current date (April) are $500,000 revenues in January, 250,000 revenues in February, 356,000 revenues in March, and $485,000 in April, a total of $1,591,000 YTD. Comparing YTD results with the results of the previous fiscal year allows the firm’s manager to identify areas that may need improvement. On the other hand, YTD comparison should be performed on companies with a common fiscal year start date to avoid distortion of results due to seasonal or other factors.

Let’s look at an example.

Example

On January 1, 2015, John invests $100,000 in stocks and bonds to construct a diversified portfolio with an asset allocation of stocks 58% and bonds 42% and $72,000 and $28,000, respectively. The current date is May 31, 2016, and John wants to calculate the portfolio returns YTD as follows:

Year to Date Example

John’s portfolio returns YTD are 15.68% or $15,683.

If John changes the allocation of his portfolio to stocks 50% and bonds 50% with $50,000 in each asset class, respectively, then his portfolio returns YTD will be 17.20% or $17,200. The calculation of YTD returns takes into account both the asset allocation and the total value of the portfolio and how these are changing during a specified period.

Summary Definition

Define Year-to-Date: YTD means a financial term that represents the time period of a business starting with the first day of the year leading up to the present day.