Year End
What is ‘Year End’ and when does it happen? ‘Year end’ is a term used to denote the end of the year – meaning the fiscal year. Its use is somewhat confusing as it is often used in a noun form; for example, “this year-end workload is heavier than normal”. A company can decide when its year starts and thereby when its year-end will occur. The year-end and year start will remain the same from year to year as it is only with consistent parameters for comparison that growth or loss can be determined.
Companies often choose their fiscal calendar according to fluctuations in the markets and convenience of time. For example, the Christmas period is a time avoided by some companies for annual assessment because not only is it very busy and so resources are stretched, but it is also a period of inflated confidence which may not represent the true status of the company. A lot of companies find it best to set their fiscal year-end on the same day each year. In some areas legislation does not allow this but in places where it is legal it is often done, sometimes resulting in a discrepancy of a week between fiscal years.
Year-ends and all that goes with them are of immense importance to accountants, investors, banks, share holders, stock exchanges, stock brokers, business owners, managers, economists; the list goes on. A year-end report announces the success or failure of a business over the past 12 months; a collection of year-end reports announces the growth or the opposite of an economy over the past 12 months. The year-end report of a large company can spell out a new factory and a thousand new jobs, or it can show the closing of a warehouse and the loss of jobs. The year-end is when businesses take stock of themselves and deliver the news to the world, the effect of which is seen on all high streets and every shopping mall – the year-end reports are the thermometer of the financial world.
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