fiscal year
Definition of fiscal year
: an accounting period of 12 months
From the M-W Editors
Examples of fiscal year in a Sentence
Sales were up in the last fiscal year.
Our fiscal year runs from October 1 to September 30.
First Known Use of fiscal year
1843
Financial Definition of FISCAL YEAR
fiscal year
What It Is
A fiscal year is an accounting period of 365(6) days that does not necessarily correspond to the calendar year beginning on January 1st. The fiscal year is the established period of time when an organization's annual financial records commence and conclude.
How It Works
A company's fiscal year will always reflect the date of the calendar year in which it ends. For example: The financial operations of the federal government are carried out in a fiscal year that begins on October 1 and ends on September 30. Therefore the government's fiscal year for 2008 would begin on October 1, 2007 and end on September 30, 2008.
Why It Matters
The key thing to remember is that a fiscal year doesn't necessarily correspond with the calendar year. Although it may not seem like very important, when a company starts its fiscal year can have an impact on its fundamental analysis. This is especially true of cyclical companies.
Consider a retailer that has an incredible first quarter. An investor may look at that company and think it will probably post even higher earnings during the end of the year, during the holiday season. However, if that company started its fiscal year in September, then its first quarter earnings will have already encompassed the higher sales that accompany the holiday shopping season, and the remaining three quarters will most likely be a little lower.
FISCAL YEAR Defined for English Language Learners
fiscal year
Definition of fiscal year for English Language Learners
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: a 12-month period used by a government, business, or organization to calculate how much money is being earned, spent, etc.
Law Dictionary
fiscal year
Legal Definition of fiscal year
: an accounting period of 12 months
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