Trailing twelve months

In finance, the trailing twelve months (TTM) is a moving measurement calculated using a company's interim or quarterly reports together with its annual report to show the twelve months of income statement data trailing the end date of an interim or quarterly report. This figure is calculated by analysts because quarterly and interim reports typically only show income statements covering 3, 6 or 9 months; because it does not represent a full year, this data can be skewed by seasonal (or cyclical) trading patterns, giving a less representative picture of a company's trading than income statement data covering 12 months.

Typically trailing twelve months figures are generated to show either the most recent twelve months of a company's trading or to show the last twelve months of its trading before a certain event, such as an acquisition, took place. If no quarterly or interim report has been issued between the last preliminary report or annual report and the date in question, then there is no need to generate trailing twelve months figures, because annual and preliminary reports already contain figures for 12 months.

Trailing 12 months figures are generated using the last interim or quarterly report a company has issued before the date in question. You generate a trailing twelve months figure for each item in the income statement by adding the figure for the reporting period since the company's financial year end to the figure in the annual report and taking off the figure for the matching period the previous year (e.g. 3 months from 1 Jan 2008 to 31 March 2008 plus 12 months to 31 December 2007 minus 3 months from 1 January 2007 to 31 March 2007 to give you 12 months from 1 April 2007 to (trailing) 31 March 2008).

A company's balance sheet is not affected by this, as a balance sheet only ever reflects a single point in time, not the events across a year.

Trailing twelve months is also sometimes known as last twelve months (LTM).

Example

If a Company reports $1 million in quarterly revenue in a 10-Q 1/1/2000, a $4 million yearly revenue on 9/1/2000, and $10 million quarterly revenue in 1/1/2001, the LTM revenue is calculated as $13 million as follows.

"Most Recent Quarter(s) + Most Recent Year - Oldest Quarters"

$4m + $10m - $1m = $13m