We are building a product that pulls public company data automatically into an analysis spreadsheet, with certain calculations done automatically. One of the calculations is recognized revenue plus the change in deferred revenue, which is used as a proxy for bookings or billings for software as a service (SaaS) and some other service or "leasing" businesses where revenue is recognized ratably.
My question is what others think about how to do this for quarterly data. Would you take the change in deferred revenue from the end of one month to the next, or would you take the change in one quarter's deferred revenue for a given year against what it was the previous year (ie., difference of Q2 2010 from Q2 2011)? Which gives you better information? Month to month could show you what new business you've signed, but very incrementally and subject to seasonal changes. Traditionally, I think we usually look at the previous year's quarter, but in today's world, is Q3 2012 even relevant - I can't even remember what was happening in the world in Q3 2011. My instinct is to stay with comparing to the previous year's quarter, so you can judge the impact of programs you've put in place over the previous year (is that increase in Sales and
