Short definition: Calendarization is the process of converting irregular or uneven cash flows into a series of regular, periodic cash flows.
Explanation: Calendarization is often used in financial modeling and analysis to simplify the comparison and projection of cash flows. It can also be used to calculate performance metrics, such as annualized returns.
Example: An investor may receive dividends from a stock on different dates throughout the year. Calendarization would be used to convert these irregular dividend payments into a series of monthly or quarterly cash flows.
Additional information (optional): Calendarization can be done using different methods, such as simple averaging or more complex interpolation techniques.