A quarter, often abbreviated “Q,” is a consecutive three-month period that a company uses to report its earnings and dividends. The quarter system is universal and does not change from company to company. Each year has four quarters. The first quarter consists of January, February and March. The second quarter consists of April, May and June. The third quarter consists of July, August and September. Finally, the fourth quarter consists of October, November and December.Securities and Exchange Commission regulations require publicly traded companies to report on their performance each quarter. U.S. companies file 10-Q reports, which contain unaudited financial statements, three times a year. In lieu of a fourth quarterly report, corporations file an annual 10-K report, which contains audited financial statements. The government also follows a quarterly accounting system. It reports on its budgets and spending quarterly and annually. Rene is considering an investment in a company. He wants to see whether its profitability is improving, staying the same, or decreasing. A good way to do this is to see how the company’s bottom line has changed from quarter to quarter. He looks at the company’s income statements, which are publicly available online, for the last eight quarters. By examining financials for three-month periods, instead of 12-month periods, he can see that the company is profitable on an annual basis only because the business is seasonal and does most business during the fourth quarter for the winter holidays. The quarterly data gives Rene a more accurate picture of the company’s performance than the annual data. Rene decides to pass on investing in this company; he would prefer a company that does steady business year round.