The Effect of the 53-Week Year on Annual Growth Rates

Mark P. Bauman, PhD, CFA, CPA (inactive)

Although many companies have a fiscal year that consists of four 3-month periods, some businesses—such as retailers—use 13-week interim periods in order to ensure comparability between periods (i.e., comparable months include the same number of selling days, including Saturdays and Sundays). For other companies, having the same day of the week as the end date for each period is useful for planning shift or manufacturing schedules, inventory counts, or other end-of-period accounting activities. This approach results in a 364-day fiscal year (13 weeks × 7 days × 4 quarters). Because one day is omitted from each calendar year (two in a leap year), a 53rd week must be added once every five or six years.