Quarter (Q1, Q2, Q3, Q4)
What it is:
How it works (Example):
In finance, the first quarter (also known as Q1) usually spans January 1-March 31; quarter 2 (Q2) usually spans April 1-June 30; quarter 3 (Q3) usually spans July 1-September 30; and quarter 4 (Q4) usually spans October 1-December 31.
For companies that operate on a calendar year basis, here's a closer look at a few recent and upcoming quarterly periods, along with the Q1, Q2, Q3, or Q4 reference associated with each period...
Q1 2017 -- January 1, 2017 to March 31, 2017
Q2 2017 -- April 1, 2017 to June 30, 2017
Q3 2017 -- July 1, 2017 to September 30, 2017
Q4 2017 -- October 1, 2017 to December 31, 2017
Q1 2018 -- January 1, 2018 to March 31, 2018
Q2 2018 -- April 1, 2018 to June 30, 2018
Q3 2018 -- July 1, 2018 to September 30, 2018
Q4 2018 -- October 1, 2018 to December 31, 2018
The quarterly periods shown above apply to any company that operates on a calendar year.
However, some companies operate on a fiscal year, and they have their own quarterly calendars that typically differ from those shown above. Companies sometimes choose to operate on a fiscal year if they operate in a business that is highly seasonal.
Why it Matters:
Quarters are the time periods around which much of the financial world revolves.
Each and every quarter, publicly-traded companies are required to issue reports outlining their financial performance during the previous quarter (called quarterly reports). These reports include a set of financial statements. Public companies in the United States file these reports via Securities and Exchange Form 10-Q.
Quarterly reports provide critical information to investors. By comparing a company's quarterly numbers to the results it posted during the same quarter in the prior year, investors can get a better sense of the company's growth trajectory. They can also compare a company's quarterly financials to those of other firms that operate in the same sector or industry.