What is a Year?

In the business world, a year is a 12-month period, four-quarter period, or 13-period stretch of time. It is not always 365 days long, though it is usually very close to that. In business, note that a fiscal year does not always go from January 1 to December 31; many companies have fiscal years beginning at other times.

How Does a Year Work?

Years are important because they create time frames for comparing information. For example, let's assume Company XYZ's fiscal year began on January 1 and that today is March 31. During this time, Company XYZ recorded the following:

Year

By comparing the 2012 revenues with the 2011 revenues, we can calculate that Company XYZ was up 50% year over year.

Why Does a Year Matter?

Yearly information is useful in looking for trends or measuring performance against goals. Remember, though that comparing year-over-year information among companies with different fiscal-year start dates can distort an analysis: The time included may vary and seasonal factors may become skewed. It is also important to remember that the extra day in leap years may also distort comparisons.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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