Trailing 12 Months (TTM)

What Is Trailing 12 Months (TTM)

Trailing 12 months (TTM) is a term used to describe the past 12 consecutive months of a company's performance data, that is used for reporting financial figures. The 12 months studied don't necessarily coincide with a fiscal-year ending period.

The Basics of TTM

Analysts and investors use TTM to dissect a wide area of financial data, for example, balance sheet figures, income statements, and cash flows. The methodology for computing TTM data might differ starting with one financial statement then onto the next.

In the equity research space, some analysts report earnings quarterly, while others do so yearly. However, investors who seek daily data about stock prices and other current data might focus on TTMs as more relevant measures, because they're more current, and they are seasonally adjusted.

TTM figures can likewise be used to calculate financial ratios. The price/earnings ratio is often referred to as P/E (TTM) and is calculated as the stock's current price, divided by a company's trailing year earnings per share (EPS).

A lot of fundamental analysis involves comparing a measurement against a like measurement from a prior term, to decipher how much growth was realized. For example, albeit the company that reports $1 billion in revenues is undoubtedly impressive, this achievement is even more notable assuming that same company's revenues increased from $500 million to $1 billion, inside the last 12 months. This marked improvement provides a clear snapshot of the company's growth trajectory.

Where to Find the TTM

The year measure is typically reported on a company's balance sheet, which is usually updated on a quarterly basis, to comply with generally accepted accounting principles (GAAP), albeit some analysts take an average of the primary quarter and the last quarter.

Line items on the cash flow statement (e.g., working capital, capital expenditures, and dividend payments) ought to be treated based on the feeding financial statement. For example, working capital is compiled from balance sheet line items, which are averaged. However, depreciation is deducted from income on a quarterly basis; so analysts view at the last four quarters as reported on the income statement.

TTM Revenue

TTM Revenue describes the revenue that a company earns over the trailing 12 months (TTM) of business. This data is instrumental in determining whether or not a company has experienced meaningful top-line growth, and can pinpoint precisely where that growth is coming from. However, this figure is often overshadowed by a company's profitability, and its capability for generating earnings before interest, tax, depreciation, and amortization (EBITDA).

TTM Yield

Used to analyze mutual fund or exchange-traded fund (ETF) performance, TTM yield refers to the percentage of income a portfolio has returned to investors over the last 12 months. This number is calculated by taking the weighted average of the yields of all holdings housed inside a fund, whether they be stock, bonds, or other funds.

Features

• The last 12 consecutive months provide investors with a compromise that is both current and seasonally adjusted.
• A company's trailing 12 months represents its financial performance for a year period; it does not typically represent a monetary year ending period.
• Trailing 12 months (TTM) is the term for the data from the past 12 consecutive months used for reporting financial figures.