Annualize is a term that is often used in finance and accounting. It is a verb that means to convert a rate or a figure into an annual rate or figure. Annualizing is commonly used to make it easier to compare different financial metrics that have different time periods, such as quarterly or monthly figures.
Definitions
The term annualize has several definitions, but they all revolve around the idea of converting a rate or a figure into an annual one. Some of the most common definitions of annualize include:
- To calculate the annual rate of interest based on a shorter period, such as a month or a quarter.
- To project the annual earnings of a company based on its current performance over a shorter period.
- To convert a non-annual figure, such as a monthly expense or revenue, into an annual figure.
Origin
The word annualize comes from the root word “annual”, which means “occurring once every year”. The suffix “-ize” means “to make or become”, so annualize literally means “to make something annual”. The term has been in use for several decades, and it is commonly used in finance and accounting.
Meaning in different dictionaries
The meaning of annualize is consistent across different dictionaries. Here are some of the definitions of annualize from popular dictionaries:
- Merriam-Webster: “to convert (something) into an annual rate or percentage”.
- Oxford Dictionary: “to calculate or estimate (something, especially income or expenditure) over a year or on an annual basis”.
- Cambridge Dictionary: “to calculate something for a year, usually from a shorter period of time”.
Associations
Annualize is often associated with finance and accounting, as it is a term commonly used in these fields. It is also associated with projections and forecasts, as annualizing is often used to project future figures based on current performance.
Synonyms
There are several synonyms of annualize that can be used interchangeably, depending on the context. Some of the most common synonyms of annualize include:
- Annualize rate.
- Annualize figure.
- Convert to an annual rate.
- Project on an annual basis.
Antonyms
There are no direct antonyms of annualize, as it is a term that describes a specific process. However, some terms that are opposite in meaning to annualize include:
- Convert to a shorter period.
- Project on a shorter basis.
- Calculate on a monthly or quarterly basis.
The same root words
The root word of annualize is “annual”, which means “occurring once every year”. Some other words that share the same root as annualize include:
- Annually.
- Anniversary.
- Annuity.
- Annular.
- Annualee.
Example Sentences
Here are some example sentences that demonstrate the use of annualize:
- We need to annualize the interest rate so that we can compare it with other investments.
- The company’s quarterly revenue was $10 million, but we need to annualize that figure to get a better understanding of its performance.
- To annualize the expense, we need to multiply it by 12 to get the total cost for the year.
- The forecast for next year’s earnings was annualized based on the company’s current performance.
- The annualized rate of return for the investment was 8%, which was higher than expected.