Seasonality definition

What is Seasonality?

Seasonality is a recurring and predictable pattern in the level of business activity over the course of a year. This pattern can be used to predict sales levels throughout the year, and so is incorporated into the annual budgeting process. When reviewing the results of a business, the analyst must take into account the impact of seasonality on reported results.

Examples of Seasonality

Here are several examples of seasonality in a business setting:

  • Gardening. The sale of seeds for vegetable gardens spikes in the spring months and then declines.

  • Golf carts. The demand for golf carts in winter climates increases during the shoulder seasons and summer months, after which it declines.

  • Retail industry. The retail trade experiences a major increase in sales prior to and during the winter holidays, followed by a slump earlier in the next calendar year.

  • Tax preparation. Accounting firms, tax software providers, and financial advisors see increased demand from January through April, peaking just before the tax filing deadline in mid-April.

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