Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Quarter (Q1, Q2, Q3, Q4)

What it is:

A quarter is a three-month period. There are four quarters in one fiscal year, as well as four quarters in each calendar year.

How it works (Example):

In finance, the first quarter (also known as Q1) usually spans January 1-March 31; quarter 2 (Q2) usually spans April 1-June 30; quarter 3 (Q3) usually spans July 1-September 30; and quarter 4 (Q4) usually spans October 1-December 31.

For companies that operate on a calendar year basis, here's a closer look at a few recent and upcoming quarterly periods, along with the Q1, Q2, Q3, or Q4 reference associated with each period...

Q1 2017 -- January 1, 2017 to March 31, 2017
Q2 2017 -- April 1, 2017 to June 30, 2017
Q3 2017 -- July 1, 2017 to September 30, 2017
Q4 2017 -- October 1, 2017 to December 31, 2017

Q1 2018 -- January 1, 2018 to March 31, 2018
Q2 2018 -- April 1, 2018 to June 30, 2018
Q3 2018 -- July 1, 2018 to September 30, 2018
Q4 2018 -- October 1, 2018 to December 31, 2018

The quarterly periods shown above apply to any company that operates on a calendar year.

However, some companies operate on a fiscal year, and they have their own quarterly calendars that typically differ from those shown above. Companies sometimes choose to operate on a fiscal year if they operate in a business that is highly seasonal.

Why it Matters:

Quarters are the time periods around which much of the financial world revolves.

Each and every quarter, publicly-traded companies are required to issue reports outlining their financial performance during the previous quarter (called quarterly reports).  These reports include a set of financial statements. Public companies in the United States file these reports via Securities and Exchange Commission Form 10-Q.

Quarterly reports provide critical information to investors. By comparing a company's quarterly numbers to the results it posted during the same quarter in the prior year, investors can get a better sense of the company's growth trajectory.  They can also compare a company's quarterly financials to those of other firms that operate in the same sector or industry.