Calendarization

 If firms report on different cycles, LTM numbers for those firms do not

match with the exact same period.

 Assume you are valuing Amazon, that its fiscal year ends on Dec 31.

 Its comparable, Walmart, reports on fiscal year ending Jan 31.

Hamid Boustanifar
1
 LTM data for firms with different reporting cycle
Company: Amazon
Fiscal year ending Dec 31. We are now on Dec 2019
Jan 1 2018 ends Dec 31
2019
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June Jul Aug Sep

LTM

Company: Walmart
Fiscal year ending Jan 31. We are now on Dec 2019
Feb 1 2018 ends Jan 31 2019
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct

LTM

Hamid Boustanifar 2
 Calendarization
 Calendarization is used to adjust financial ending dates for all comps to
be the same as the target company, i.e, Amazon, in our case.
 So, we want LTM data for period Oct 1, 2018 – Sep 30, 2019
Company: Walmart
Fiscal year ending Jan 31. We are now on November or Dec 2019

2018 ends Jan 31 2019

Q1 Q2 Q3 Q4 Q1 Q2 Q3
Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct

LTM with Calendarization

Calendarized 2019 YTD (Current Stub) = Current Stub – 1/3* Q3 2019

Calendarized 2018 YTD (Prior Stub) = Prior Stub – 1/3*Q3 2018

Hamid Boustanifar
3