Final answer:
Corporations may adopt a fiscal year called a natural business year, which allows for better planning by aligning with the lowest points in their annual operating cycle. This helps businesses prepare for the next cycle more effectively and facilitates accurate economic assessments during quieter periods.
Step-by-step explanation:
A fiscal year that ends when business activities are at the lowest point in the annual operating cycle is often referred to as a natural business year or sometimes as a fiscal year coinciding with the business cycle trough. This timing allows the corporation to conduct accounting and assessment when the business activities are at their quietest, providing an opportunity for more accurate analysis and planning for the next cycle.
During a recession, businesses may assess the economic climate before making decisions such as staying in operation or closing temporarily. The concept of a fiscal year is vital in planning and budgeting, not only for businesses but also within the government. For instance, the federal budget in the U.S. is prepared for a fiscal year starting on October 1 and ending on September 30 of the following year. Fiscal policies, such as those used during the recession of 2008-2009, can be employed to counteract economic downturns, although they often involve lags that can pose challenges for immediate results desired by politicians.