A financial year is a twelve-month period selected by a business or organization to prepare its annual financial statements and reports. While it is commonly aligned with the calendar year, running from January 1st to December 31st, many entities opt for a different timeline.

For instance, companies in certain industries with peak activities differing from those of the calendar year, such as retail, might start their financial year on a date like July 1st or April 1st. Governments too often follow non-calendar fiscal years for budgetary conveniences.

This period serves as the basis for calculating various financial metrics, such as revenues, expenses, and net income, aiding clear communication of a company's financial performance to stakeholders. Tax filings and audits are also usually tied to the financial year.

Sentence usage example: "Our company's financial year starts in April and ends in March the following year, allowing us to align better with our production cycles."