What is a Calendar Year?
A calendar year is the period between January 1 and December 31.
How Does a Calendar Year Work?
If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December 31, then Company XYZ's fiscal year is said to be on a calendar year basis. Many companies align their fiscal years with the calendar year, but some don't. For example, Company ABC might start its fiscal year on October 1 and end on September 30.
Why Does a Calendar Year Matter?
It is important for investors to know whether a company uses a calendar year or another period for their fiscal year, especially when comparing companies in seasonal industries.