Financial modelling terms explained

Fiscal Year

A fiscal year (or financial year) is the 12-month period used by an organization to keep track of its business activities and submit financial reports to the government.

What is a Fiscal Year?

A Fiscal Year is the period of time a government uses to calculate and track its financial performance. Most governments use a Fiscal Year that runs from January 1 to December 31. Fiscal Year calculations include government revenue and expenditure totals for the year, as well as other key financial metrics. Fiscal Year data is used to make informed decisions about a government's budget and long-term financial planning.

What is the Difference Between a Fiscal Year and a Calendar Year?

A fiscal year is a period of twelve consecutive months used by governments and businesses for accounting and budget purposes. A calendar year is the twelve-month period from January 1 to December 31.

Why Do Businesses Use Fiscal Years Rather Than Calendar Years?

There are a few reasons businesses might use fiscal years rather than calendar years. One reason might be to make it easier to track financial performance over a longer period of time. Often, businesses will report their performance over a fiscal year, which is typically a 12-month period that doesn't necessarily correspond with the calendar year. This can make it easier to compare performance from year to year. Another reason businesses might use fiscal years is to align their financial reporting with their accounting periods. Often, businesses will have different accounting periods for their financial statements than they do for their actual fiscal year. This can make it easier to track and report performance. Finally, some businesses use fiscal years as a way to manage their cash flow. By having a fiscal year that doesn't correspond with the calendar year, businesses can stagger their payments and receipts over a longer period of time.

What are the Different Types of Fiscal Years?

There are many different types of fiscal years, but the most common are the calendar year and the fiscal year. A calendar year is the 12-month period from January 1 to December 31. A fiscal year is the 12-month period that a company or government uses to track its financial performance. There are several different types of fiscal years, including the standard fiscal year, the modified fiscal year, and the fiscal year calendar.

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