Question on Calendarization for Comp Analysis

ikiq's picture
Rank: Senior Monkey | banana points 78

Hey guys,

When performing comparable company analysis on a company with a FY other than Dec 31, what information do you actually calendarize for the company's financials (Reported Income Statement Section/Balance Sheet Data Section)?

Also if you do need to change the company's financial, couldn't you just find the exact CY sales with some basic algebra rather than using the calendarization calculation (CY sales = (Month #)(Actual Fiscal Year Sales)/12 + (12 - Month #)(Estimated Fiscal Year Sales)/12) ?

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Comments (26)

Mar 16, 2012
ikiq:

Hey guys,

When performing comparable company analysis on a company with a FY other than Dec 31, what information do you actually calendarize for the company's financials (Reported Income Statement Section/Balance Sheet Data Section)?

There's no set format for which financials to compare. That's up to the scope & nature of your analysis.

ikiq:

Also if you do need to change the company's financial, couldn't you just find the exact CY sales with some basic algebra rather than using the calendarization calculation (CY sales = (Month #)(Actual Fiscal Year Sales)/12 + (12 - Month #)(Estimated Fiscal Year Sales)/12) ?

Correct. That's actually how most analysts calendarize. I'm surprised you're mentioning it as it's some alternative/uncommon method.

Mar 16, 2012
SaucyBacon85:
ikiq:

Hey guys,

When performing comparable company analysis on a company with a FY other than Dec 31, what information do you actually calendarize for the company's financials (Reported Income Statement Section/Balance Sheet Data Section)?

There's no set format for which financials to compare. That's up to the scope & nature of your analysis.

ikiq:

Also if you do need to change the company's financial, couldn't you just find the exact CY sales with some basic algebra rather than using the calendarization calculation (CY sales = (Month #)(Actual Fiscal Year Sales)/12 + (12 - Month #)(Estimated Fiscal Year Sales)/12) ?

Correct. That's actually how most analysts calendarize. I'm surprised you're mentioning it as it's some alternative/uncommon method.

simply enjoying your profile pic

Mar 16, 2012

Thanks for response.

I'm actually trying to spread comps for the first time. Just a student here :/

Mar 16, 2012

Bump

LA Bull

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Mar 16, 2012

Bump -- please help!!!

LA Bull

Mar 16, 2012

Bump -- please help!!!

LA Bull

Mar 16, 2012

You just use the most recent stub period, the latest 10k and the matching stub period from the previous year. If you're asking how to calculate LTM data to the very exact day, then you're asking for the impossible (I think, I may be wrong). Unless you're asking a different question in which you need to elaborate on your question better.

Mar 16, 2012

Ok -- maybe this will clarify -- so if I am in the middle of Q4 (like november 15th) then I would use Q3 stubs -- meaning I would not be able to account for any of Q4?

I hope that is clear -- if not let me know

LA Bull

Mar 16, 2012

bump -- please just need one more simple answer :)

LA Bull

Mar 16, 2012

If you're in the middle of a quarter, you can't calculate LTM as of that date. Companies rarely ever release full financials midway through a quarter. You'd have to calculate LTM as of the latest finished quarter. Its just impossible to do otherwise simply due to a lack of information.
Calendarization isn't difficult in any capacity I'd say. Its simply: Latest FYE + Latest Stub Period - Prior Stub Period. There's no real other way to calculate it simply because you don't get financials outside of the quarterly / yearly data.

    • 1
Mar 16, 2012

Got it! Thank you so much Mr Bateman! Just don't kill me with an Ax! ;)

LA Bull

Mar 16, 2012

All of my confusion lay in your response -- I didn't understand how calendarization worked mid-quarter per se -- but now I realize -- as you said -- you cannot do that -- so if your in the middle of Q4 you would use Q3 as the "most recent stub" -- got it!

LA Bull

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Mar 16, 2012

You calendarize in order to compute LTM/TTM numbers. They are not mutually exclusive.

Best Response
Mar 16, 2012

If the company reports their Fiscal Year 2015 results in June 30th and you want to have calendar 2015 results you would take 3Q15, 4Q15 and the first 2 quarters of the 2016 Fiscal year (1Q16 and 2Q16).

    • 2
Mar 16, 2012

If the company reports their Fiscal Year 2015 results on January 31 (or any other date that isn't at the end of one of the traditional 4 quarters), how do you calendarize?

Mar 16, 2012

You could weight 4Q15 as 1/3 (since only the month of January is relevant and one month is roughly a third of a quarter), take 1Q16, 2Q16, 3Q16 and 2/3 of 4Q16 (take November and December but drop January). To be honest though I'm not sure many people would bother doing this for one month.

Mar 16, 2012

It represents the sales from Jan 1 to Dec 31 in X year, yes

Mar 16, 2012

thanks :)

LA Bull

Jun 22, 2018

Can we apply the method of calendarization discussed above to balance sheet data?

For eg, if my company's financial year ends at June 30 20XX, how can I get the amount of Accounts Receivable as at December 31 (20XX-1)? I was wondering whether it would make sense to calendarize in this example to get the answer since balance sheet line items are stock variables (at a certain date) and I have only seen examples of calendarization with flow variables (over a period).

Thanks.

Jan 11, 2019

Hello guys,

Is it possible to use estimated values for an upcoming period to perform a calendarization exercise ?

Jan 11, 2019
    • 1
Jan 11, 2019