I don’t understand why the financial year doesn’t just line up with Jan, why start it with July? Please eli5?
In: Economics
The fiscal year end is often different than December 31st for practical reasons.
A store that does seasonal business like a retail store chain for example doesn’t want it’s year end on Dec 31st because Christmas and Boxing Day are the biggest days of the year for them.
It’s better to do year end mid year when business is slower, because that process involves doing inventory and a lot of accounting work that gets in the way when there’s a Christmas rush.
Fiscal year end is also when budgets are tight because managers are maximizing profits. So you don’t want to be doing a bunch of hiring or buying inventory just before.
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