Trailing Twelve Months (TTM)
Definition - What does Trailing Twelve Months (TTM) mean?
The Trailing Twelve Months (TTM) refers to the last 12 month period for a selected financial metric such as revenue, earnings, or EBITDA. For example, the TTM revenue of a company for the month of May would include the revenue from June of the prior year to May of the current year. The trailing twelve months is also sometimes referred to as the Last Twelve Months (LTM).
Divestopedia explains Trailing Twelve Months (TTM)
The TTM financial results are often used to perform valuations on companies. The TTM calculation is particularly important for companies that have experienced a strong last 12 months. Take for example a company that has fiscal year-end of December 31. This company has been experiencing significant growth, and on September 30 it is approached by a potential purchaser. The company owner will want to calculate the TTM financial results to assist in the valuation, so a full year of results is included.
The TTM calculation can also be done on a "pro-forma" basis. This calculation would present the last 12 months of financial results including the estimated impact of a specific event that occurred during the 12 month period. This specific event could be an acquisition, the launch of a new product line, or the addition of a manufacturing facility. The pro-forma TTM would be calculated to show what the financial results would have been if this specific event had been included.