Calenderization is the accounting process of matching the financial records of 2 companies. All companies have different start/end dates to their financial year so when attempting to compare companies for a merger or public comparable analysis or for any other reason, this must be taken into account. It is not very feasible to compare, for example, 2 retailers where one has a financial year ending in October and the other has one ending in January (Thanksgiving + Christmas overlap).
The period compared must be over the same time period so when comparing fiscal years, the measurements must be adjusted. Using the above example with Retailer 1 having a fiscal year ending in November and Retailer 2’s fiscal year ending in January, the periods compared would be as follows:
- Retailer 1 – Q1 2010, Q2 2010, Q3 2010, Q4 2010
- Retailer 2 – Q4 2009, Q1 2010, Q2 2010, Q3 2010
This would match up the period of both companies to be over the same yearly period, and therefore they could be compared fairly.