Blog · Board and management reporting · Finance and FP&A teams
Quarter over quarter analysis compares a fiscal quarter with the preceding fiscal quarter. Build consistent revenue and cost totals, reconcile business-unit contributions, and separate sequential change from year-over-year and seasonal context.
Quarter over quarter analysis measures the movement between consecutive fiscal quarters and explains which business units or accounts produced it. Compare completed periods on the same reporting basis, calculate dollar and percentage changes, then prove the company movement from its component rows. Add year-over-year context when seasonal demand could explain the sequential change.
The previous quarter means the immediately preceding fiscal quarter, including the quarter that crosses a fiscal-year boundary. It does not automatically mean the preceding three calendar months. Obtain the controller's fiscal calendar and close status before filtering ledger rows.
The IRS's accounting-year guidance distinguishes calendar, fiscal and 52-53-week tax years. Tax-year definitions do not set your management reporting calendar, but they illustrate why a company may not follow calendar-year boundaries. Use the company's approved period mapping, including any extra reporting week.
Quarterly dollar change = Current quarter - Previous quarter
Quarterly percentage change = (Current quarter - Previous quarter) / Previous quarter
The denominator is the previous quarter. A quarterly year-over-year comparison uses the same quarter from the prior year instead. The percentage-change formula guide covers zero and negative denominators; this workflow concentrates on fiscal-period control and interpretation.
Export posting date, fiscal year, fiscal quarter, business unit, account group and amount. Use posted adjustments for both completed quarters. Normalize ledger signs into a reporting column so revenue and costs are positive and operating profit is revenue less costs.
For a calendar-quarter company, a sheet named Ledger can hold posting date in A, unit in B, account group in C and reporting amount in D. Put unit names in A2:A4 of a summary. First-quarter revenue in B2 is:
=SUMIFS(Ledger!$D$2:$D$10000,Ledger!$B$2:$B$10000,$A2,Ledger!$C$2:$C$10000,"Revenue",Ledger!$A$2:$A$10000,">="&DATE(2026,1,1),Ledger!$A$2:$A$10000,"<"&DATE(2026,4,1))
For second-quarter revenue, use April 1 as the start and July 1 as the exclusive end. Replace "Revenue" with "Operating costs" for the cost columns. For a noncalendar fiscal quarter, substitute its actual boundary dates or summarize using the approved fiscal-period labels.
Google's SUMIFS documentation describes summing values that meet multiple criteria. These formulas use Google Sheets syntax. Covirage is not affiliated with Google.
An illustrative Indiana industrial supplier reports the following results for the first and second calendar quarters of 2026. Both quarters include the same units and accounts. All amounts are USD; dollars are exact and percentages are rounded to one decimal place after calculation.
| Unit | Q1 revenue (USD) | Q2 revenue (USD) | Revenue change (USD) | Revenue change | Q1 costs (USD) | Q2 costs (USD) |
|---|---|---|---|---|---|---|
| Industrial | 1,800,000 | 1,980,000 | 180,000 | 10.0% | 1,350,000 | 1,470,000 |
| Commercial | 900,000 | 855,000 | -45,000 | -5.0% | 630,000 | 650,000 |
| Service | 300,000 | 315,000 | 15,000 | 5.0% | 240,000 | 245,000 |
| Total | 3,000,000 | 3,150,000 | 150,000 | 5.0% | 2,220,000 | 2,365,000 |
With the header in row 1, enter these formulas in D2 and E2 and fill down through row 4:
=C2-B2
=IF(B2=0,"n/a",D2/B2)
Sum the dollar columns in row 5. Company growth in E5 is =D5/B5, giving 5.0%. The arithmetic average of the three unit growth rates is 3.3%, which does not reproduce the total because it gives each unit equal weight.
Revenue rose $150,000, while costs rose $145,000, or 6.5%. Operating profit therefore moved from $780,000 to $785,000. The profit increase of $5,000 equals the revenue increase less the cost increase; the higher revenue total did little to increase profit.
Operating margin is profit divided by revenue: 26.0% in Q1 and 24.9% in Q2. Review gross profit margin separately if the question concerns production or merchandise costs; this example's cost total includes all operating costs.
Divide each unit's revenue movement by the previous company revenue total. These are contributions to company growth in percentage points, rather than growth rates for the individual units.
| Unit | Revenue movement (USD) | Prior company revenue (USD) | Contribution |
|---|---|---|---|
| Industrial | 180,000 | 3,000,000 | 6.0 percentage points |
| Commercial | -45,000 | 3,000,000 | -1.5 percentage points |
| Service | 15,000 | 3,000,000 | 0.5 percentage points |
| Total | 150,000 | 3,000,000 | 5.0 percentage points |
The first contribution is =D2/$B$5. The dollar bridge must close to zero:
=SUM(D2:D4)-(SUM(C2:C4)-SUM(B2:B4))
Then reconcile each quarter's revenue and costs to the closed income statement. A zero bridge proves the summarized rows add correctly; the income-statement tie checks whether the row population is complete. Investigate unmapped units and unallocated corporate costs before presenting a business-unit explanation.
Use variance analysis for the next account-level investigation. Industrial supplied the largest positive movement, but the table alone does not establish whether price, volume, an acquisition or timing caused it.
Suppose the same export contains the following company revenue totals:
| Fiscal quarter | Revenue (USD) |
|---|---|
| Q2 2025 | 2,800,000 |
| Q2 2026 | 3,150,000 |
The current Q2 total is up 12.5% year over year: (3150000-2800000)/2800000. The sequential result remains 5.0%. Label both because they compare different periods and answer different questions.
Use seasonality in sales measures to evaluate recurring patterns across years. A single prior-year comparison adds context but cannot prove that every difference is seasonal. Customer wins, price changes and product mix can alter the pattern.
Inspect monthly totals inside each quarter to find late-quarter concentration, then use month over month analysis for that shorter interval. Sum the dollars into quarters before calculating quarterly growth. Do not average monthly rates or annualize the quarterly rate without stating the assumption that later quarters repeat it.
Bring your quarterly ledger exports and approved fiscal-period mapping as files or a Google Sheet. Covirage maps the columns, and its tools compute and check quarter totals, rates and business-unit contributions; the external AI model explains the changes with every figure traced to its rows. Create a free Covirage account, then set up your business and bring a sample of your own data.
See FP&A reporting for the wider finance reporting context.
Subtract the prior fiscal quarter from the current fiscal quarter and divide the difference by the prior fiscal quarter. Use totals for the same metric and scope. If the prior amount is zero, show the dollar change and mark the percentage as unavailable.
No. Quarter over quarter compares consecutive quarters, while a quarterly year-over-year comparison uses the same fiscal quarter of the previous year. Both can be useful, but their denominators differ. Label them separately so a seasonal rebound is not confused with annual growth.
No. Sum monthly revenue or expense amounts within each quarter, then calculate growth from the quarter totals. Each monthly growth rate has a different comparison base. An arithmetic average of those rates does not reproduce the change between quarterly dollar totals.
Keep the reported fiscal-quarter total and add a clearly labeled comparable-period view where useful. Use the company's fiscal calendar to identify the extra week and its actual results. A per-week measure adds context but does not remove seasonality, promotions or changes in business mix.