A quarter is generally referred to as a three-month period on a company’s financial calendar. It acts as a basis for periodic financial reports and the paying of dividends. Most financial reporting and dividend payments are done quarterly.
Not all businesses match the first quarter with the first three months of the year (Jan, Feb,Mar) some do it sooner and some do it later depending on the business.
The calendar year is generally divided into four quarters, and abbreviated as Q1, Q2, Q3 and Q4.
In Gregorian calendar:
First quarter, Q1: 1 January – 31 March (90 days or 91 days in leap years)
Second quarter, Q2: 1 April – 30 June (91 days)
Third quarter, Q3: 1 July – 30 September (92 days)
Fourth quarter, Q4: 1 October – 31 December (92 days)
In Chinese calendar, the quarters are associated with the 4 seasons of a year:
Spring: 1st to 3rd month
Summer: 4th to 6th month
Autumn: 7th to 9th month
Winter: 10th to 12th month
The impact of the end of each quarter
The end of each quarter marks a significant milestone for businesses, investors, and financial reporting purposes. Many companies use the end of each quarter to report their financial results, provide updates to stakeholders, and evaluate their performance.
For instance, if a company’s fiscal year starts on January 1st, the end of the first quarter (Q1) would be March 31st, the end of the second quarter (Q2) would be June 30th, the end of the third quarter (Q3) would be September 30th, and the end of the fourth quarter (Q4) would be December 31st.
Quarterly reports often include financial statements, such as income statements, balance sheets, and cash flow statements, providing insights into a company’s revenue, expenses, and overall financial health during the specific quarter.
Furthermore, quarterly periods are also important for economic analysis, tracking business trends, and making informed decisions about investments, market conditions, and consumer behavior. They are a way to segment the year and gain a clearer understanding of changes and developments over time.