How do you annualize earning?

Answer 1

To annulize earnings in a meaningful way, one must take into account at least the following factors: * Seasonality of the business * Current trends in the industry (for example, are prices and/or volumes generally increasing or decreasing) * Current trends experienced by the company (for example, is the company gaining market share or loosing it) * Specific major factors that affected the historic earnings being annualized (i.e. major new customers or lost business, major new products, pricing changes, cost changes, union contracts, regulatory changes, etc.) Factors that may have had only a limited impact (or even no impact) during the past period but a more full impact in the future. * Usual lead/lag times inherent in the business of the company. For example, vacation destinations are often booked significantly in advance. Therefore, an early snowfall in the Rockies, will likely persuade skiers to book there instead of New England this season.