what is annualization 
to annualize a number means to convert a short term calculation or rate into an annual rate typically an investment that yields a short term rate of return is annualized to determine an annual rate of return which may also include compounding or reinvestment of interest and dividends it helps to annualize a rate of return to better compare the performance of one security versus another annualization is a similar concept to reporting financial figures on an annual basis understanding annualization