Commercial Year

AAA

DEFINITION of 'Commercial Year'

A commercial year is a 360 day year composed of 12 months with each lasting 30 days. The commercial year adjusts for differences in the number of days in each calendar month, making it easier to track changes in a business.

INVESTOPEDIA EXPLAINS 'Commercial Year'

A common application for using a commercial year can be found in the retail sector. If a manager wishes to understand changes in the revenues of stores from month to month, using a calendar year may obscure economic reality. For example, sales for January could be higher than sales in February simply because there are more days in January than in February. Thus, a manager would prefer to see results in 30 day increments to evaluate the true extent of any change in business.

RELATED TERMS
  1. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial ...
  2. Last Fiscal Year - LFY

    The most recent 12-month accounting period that a business uses ...
  3. Fiscal Year-End

    The completion of a one-year, or 12-month, accounting period. ...
  4. Tax Year

    The period of time which is covered by a particular tax return. ...
  5. Year

    A period of time that is comprised of 12 consecutive months. ...
  6. Fiscal Year - FY

    A period that a company or government uses for accounting purposes ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Investing Basics

    12 Things You Need To Know About Financial Statements

    Discover how to keep score of companies to increase your chances of choosing a winner.
  2. Personal Finance

    Breaking Down The Balance Sheet

    Knowing what the company's financial statements mean will help you to analyze your investments.
  3. Investing Basics

    The Importance Of Corporate Transparency

    Clear and honest financial statements not only reflect value, they also help ensure it.
  4. Fundamental Analysis

    Financial Footnotes: Start Reading The Fine Print

    Find out what could be hidden in this often-overlooked part of the financial statements.
  5. Active Trading Fundamentals

    Evaluating A Company's Management

    Financial statements don't tell you everything about a company's health. Investigate the management behind the numbers!
  6. Investing

    What's a Debit Note?

    A debit note is a document used by a seller to inform a purchaser of a dollar amount owed. As the name indicates, it is a note from the seller that a debit has been made to the purchaser’s account. ...
  7. Professionals

    What does C-Suite Mean?

    C-Suite is a slang term used to describe the highest level senior executives of a corporation. This is the decision-making, power center of a company. These individuals are usually paid well, ...
  8. Investing

    What's a Monopolistic Market?

    A monopolistic market has a significant number of characteristics of a pure monopoly. Though there may be more than one supplier, the market has high prices, suppliers tightly control availability ...
  9. Professionals

    What's Human Capital?

    Human capital is a company asset, but it’s not listed on the balance sheet. Human capital is all of the creative skills and knowledge embodied in the employees of a company -- skills that bring ...
  10. Investing

    What's Capitalization?

    Capitalization has different meanings depending on the context.

You May Also Like

Hot Definitions
  1. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  2. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  3. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  4. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  5. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  6. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
Trading Center