What it means
Financial statements age quickly. The most recent quarter, shortened to MRQ, is the reporting period a company has just closed and disclosed, and it anchors most current analysis of the business.
Public companies report quarterly. In the United States the Form 10-Q, filed with the Securities and Exchange Commission, carries the quarter's income statement, balance sheet, cash flow and management commentary, unaudited but governed by securities law.
The MRQ matters because ratios are only as fresh as their inputs. A price-to-earnings figure built on last year's earnings tells you what was; metrics built on the most recent quarter, or on trailing twelve months ending that quarter, describe what is.
Comparisons need care. Quarter over same quarter last year strips out seasonality; quarter over previous quarter shows momentum but can mislead in seasonal businesses like retail, where the fourth quarter dwarfs the rest.
Fiscal calendars differ. Many companies close quarters in March, June, September and December, but retailers often end their year in January, and some firms use 4-4-5 week calendars, so one company's MRQ may cover different weeks than a rival's.
Data vendors label fields with it. A screening tool showing revenue growth or profit margin almost always computes from the MRQ or the trailing twelve months ending in it, and the label tells you exactly how fresh the number you are trusting is.
For a business owner reading a supplier's or customer's accounts, the MRQ is a credit tool. The latest quarter's cash balance, debt maturities and margin direction say more about survival odds than any annual report now eleven months stale.
Management commentary travels with the numbers. The discussion section of the quarterly filing explains why margins moved and what changed in the order book, and seasoned readers weigh those words against the figures rather than taking either alone.
Auditors review the annual figures; the quarters in between are the market's problem to police.
In practice
Real-world examples.
Example
An analyst updates her valuation model the day a retailer files its 10-Q, replacing the prior quarter's assumptions with the MRQ's revenue, margin and inventory figures, then reruns her price target before the market opens.
Example
A lender's covenant test references the borrower's most recent quarter, so a sudden dip in earnings before interest and tax can trigger a review without waiting for the audit, a clause that turned out to be the lender's early warning system.
Example
A job candidate reads a prospective employer's MRQ commentary and notices restructuring charges and falling cash, information the annual report from nine months ago never mentioned, and she asks sharper questions in the interview as a result.
Formula
Calculation
Trailing twelve months = sum of the last four quarters. Quarter-on-quarter growth = (MRQ - prior quarter) / prior quarter. Year-on-year growth = (MRQ - same quarter last year) / same quarter last year.
Worked example. Quarterly net income, oldest to newest, prints at $8 million, $11 million, $9 million and $14 million, so trailing twelve months are 8 + 11 + 9 + 14 = $42 million. The MRQ of $14 million grew (14 - 9) / 9 = 55.6% on the prior quarter. If the same quarter a year earlier was $12 million, year-on-year growth is (14 - 12) / 12 = 16.7%, the fairer test for a seasonal business. When the next quarter prints at $10 million, the oldest $8 million drops out of the window, and trailing twelve months become 11 + 9 + 14 + 10 = $44 million.Case study
Seen in the real world.
In this illustrative fictional case, Priya, credit manager at a components distributor, sets a rule that no customer's limit is renewed on financials older than one quarter. When a large buyer's MRQ shows inventory doubling while sales stall, she halves their terms before the annual report exists. The buyer's failure six months later validates the discipline, and her board adopts quarterly covenant reviews for every account above a set size.
Watch out
Common mistakes.
- Comparing the MRQ with the quarter immediately before it in a seasonal business, when the honest benchmark is the same quarter a year earlier.
- Treating one quarter as a trend, when a single period can be distorted by strikes, storms, one-off charges or a pulled-forward promotion, so confirm a direction across at least two quarters.
- Forgetting that quarterly figures are usually unaudited, when estimates and accruals can still shift materially before the annual audit signs off.
Questions
People also ask.
What does MRQ stand for?
Most recent quarter: the latest completed fiscal quarter a company has reported. Its figures are the freshest official data on the business and anchor most current ratios.
Where do MRQ figures come from?
From quarterly filings such as the SEC's Form 10-Q in the United States, or interim reports elsewhere. They include the income statement, balance sheet, cash flow and management discussion. Earnings press releases usually summarise the same numbers first.
How should the MRQ be compared?
Against the same quarter last year to remove seasonality, and against the prior quarter only with care. Rolling four-quarter sums, the trailing twelve months, smooth both problems. Comparing across companies also requires matching fiscal calendars.
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