Final answer:
Most businesses choose fiscal years which correspond to their own financial cycles and industry norms.
Step-by-step explanation:
Most businesses choose fiscal years which correspond to their own financial cycles and industry norms. A fiscal year is a 12-month period that a company uses for financial reporting. Although the most common fiscal year is the calendar year, which starts on January 1st and ends on December 31st, businesses may choose a different start and end date if it aligns better with their operational needs.
For example, a business in the retail industry might choose a fiscal year which begins on February 1st and ends on January 31st of the following year. This allows them to include the busy holiday season in their financial reports for a complete picture of their annual performance.
Similarly, businesses in agriculture might choose a fiscal year that aligns with the planting and harvesting seasons. By choosing a fiscal year that matches their industry cycles, businesses can better analyze their financial performance and plan for the future.