What Does Trailing Twelve Months Mean?

The trailing twelve month (TTM) refers to the previous 12 months of a company’s financial results. This 12-month period does not necessarily have to coincide with the company’s fiscal year calendar. It simply reports what the numbers were for the previous consecutive 12-month period, regardless of when it started.

The trailing twelve month number is used to calculate many financial ratios, such as the all-important price-to-earnings ratio and other ratios that gauge the overall financial health, valuation and operation of a company.

Savvy investors therefore also look at the TTM figures in order to get a more accurate snapshot of exactly how a company has performed from exactly a year ago until now. This figure helps to reduce the effects of seasonality and also softens the impact of temporary changes in financial results. A major nonrecurring reduction of revenue will not count for as much when seen in the TTM as it might in a fiscal-year report.

TTM numbers are most effective when they are used to predict future results and carry less weight when it comes to analyzing short-term changes. Companies that are internally planning out their future finances use TTM as a way to look at specific elements of financial results, such as how much revenue comes from one product or service as opposed to others. This metric gives them the most up-to-date picture of what is happening with the company’s cash flow.

The trailing twelve months is also sometimes referred to as the Last Twelve Months (LTM).


Divestopedia Explains Trailing Twelve Months

Trailing twelve month figures can tell investors and analysts about the growth or decline of a company when it is compared with the previous TTM that occurred. If the company’s revenue has increased by 50% from the previous TTM to the last one, then this clearly reflects that the company is experiencing rapid growth. TTM is thus ultimately a key figure in fundamental analysis.

The TTM is often compared to a company’s total operating expenses in order to gauge whether the company is running in the red or the black. The TTM is frequently a vital component of many other financial metrics that reveal how efficiently a company is operating and how much profit is coming in.

Investors and analysts must manually glean a public company’s TTM if the company does not release its performance history in this form. Quarterly filings with the SEC can provide the necessary data to do this in many cases, as well as year-to-date (YTD) information and annual reports. One way to calculate a company’s TTM is by taking the four most recent quarters of performance and adding on the data from the end of the last quarter until now (assuming that that data is available). Then you subtract the information that was published more than a year ago.

For example, if a company’s fiscal year begins on March 1st, and today is April 17, then you can go back four quarters to March 1st of last year and then add on the additional data from March 1st of this year until today. Then you eliminate the data that covered March 1st through April 17th of last year in order to compute the TTM.

TTM numbers are always completely up-to-date. They take factors such as high sales during the holiday season into effect and smooth out any seasonal effects. For this reason, many financial analysts pay more attention to this metric than the annual statements that a company files with the SEC.



Last Twelve Months


Trailing 12 Months

Trail-Twelve Months

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