A:

This is a question that puzzles many people because, unlike individuals, who must file their taxes to the IRS every year within the exact same time period (by April 15), companies have the benefit of deciding when their fiscal year begins and ends.

There are a couple of things to know:

  1. Corporations must declare their fiscal year-end (or beginning) when they first form. They can't just change it from year to year.
  2. Unlike individuals, corporations must submit quarterly reports of their financial figures to the SEC.

However, the main reason companies choose different fiscal year-ends is that their industries fluctuate at various times. Thus, by being able to adjust the timing of their earnings reports, companies can minimize the negative seasonal effects that occur within their specific industries. For example, a company that has to buy inventory during the summer months probably won't want to report its earnings during this time because the inventory purchases will decrease its earnings.

To learn more about earnings reports, check out Surprising Earnings Results, Research Report Red Flags and Types Of EPS.

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