Fiscal Quarters Definition
Written by True Tamplin, BSc, CEPF®
Updated on January 11, 2021
How Many Quarters in a Year?
There are four quarters in a year.
A quarter refers to a three month period (i.e. one quarter of one year) on a company’s financial calendar, that establishes a period for financial reports and dividend payments.
Most financial reporting is done on a quarterly basis since this increment of time is a sweet spot, where data is less prone to the spikes and dips of smaller time frames, and investors receive timely updates on company performance.
Financial quarters are typically expressed as “Q”followed by the quartile number;
1.) The first quarter is Q1
2.) The second quarter is Q2
3.) The third quarter is Q3
4.)The fourth quarter is Q4
Making the four quarters of the year.
Quarters may also be represented along with their relevant year, as in Q1 2020 or Q1/20.
Investors rely on quarterly earnings reports to determine financial trends which influence investment choices.
Consequently, companies take quarterlies very seriously, since it has a big impact on investment/stock value.
What Does Quarterly Mean?
Publicly traded companies are required to file quarterly reports with the Securities Exchange Commission, or SEC.
Quarterly reports are often audited to create confidence in the report, however an audit is not required.
A “fiscal quarter”(or business quarters) is one-fourth of a fiscal year, which is a defined 12-month period for tax and accounting purposes.
For most businesses, the fiscal year starts on January 1st and ends on December 31st; however, some businesses begin and end their fiscal year on different dates.