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Seasonality: Why Comparing Q4 to Q3 Can Be Misleading

Reading Financial Statements • Beginner Investing • 6 min

Many businesses don't generate revenue evenly across the year — and treating a naturally lumpy business as if its quarters should all look alike is a common way to draw the wrong conclusion from a perfectly normal pattern. Retailers are the clearest example: holiday shopping concentrates a meaningful share of many retailers' annual sales into the fourth quarter (October through December), meaning Q4 revenue will…

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