Quarter (Q1, Q2, Q3, Q4)
What it is:
A quarter is a three-month period. There are four in one fiscal year.
How it works (Example):
In the finance world, quarter 1 usually spans January 1-March 31; quarter 2 usually spans April 1-June 30; quarter 3 usually spans July 1-September 30; and quarter 4 usually spans October 1-December 31. However, companies may have their own quarterly calendars.
Why it Matters:
Quarters are the time periods around which much of the financial world revolves. Reports issued that cover the performance during a quarter (called quarterly reports) usually involve a set of financial statements. Public companies in the United States file these reports via Securities and Exchange Form 10-Q.
Quarterly reports help investors take the pulse of the companies they invest in. Comparing the quarterly information to the previous year's information for the same quarter can rich insight into how seasonal a company's business is, short-term performance and growth rates in a variety of measures, and information to compare with similar companies.