Fiscal year

A fiscal year is like a special calendar that companies and governments use to keep track of their money. Just like you use a regular calendar to keep track of your birthdays, holidays, and special events, companies and governments use a fiscal year to keep track of their income, expenses, and budgets.

But, instead of having 12 months like a regular calendar, a fiscal year can have a different number of months. And it can start at a different time of the year than January 1st. For example, a fiscal year could start on July 1st and end on June 30th of the following year. Or it could start on October 1st and end on September 30th.

Why is this important? Well, companies and governments use their fiscal year to plan and manage their finances. They need to know how much money they're making and spending, and when they're making or spending it. This helps them make smart decisions about money, like whether to invest in new projects, hire more people, or cut back on expenses.

So, the next time you hear grown-ups talking about the fiscal year, remember that it's just like a special calendar that helps them keep track of their money. And that's why it's so important!