Calendar Year
What it is:
The calendar year is the period between January 1 and December 31.
How it works (Example):
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 many don't. For example, Company 123 might start its fiscal year on October 1 and end on September 30.
Why it Matters:
It is important for investors to know whether a company uses the calendar year or another period for their fiscal year, especially when comparing companies in seasonal industries.
