What Is Trailing 12 Months (TTM)?

What Is Trailing 12 Months (TTM)?

Let me explain what trailing 12 months, or TTM, really means. It's a way to look at a company's performance data over the past 12 consecutive months when we're reporting financial figures. This gives you a clearer picture of the business's current financial health, unlike annual filings that might include outdated info. The 12 months don't have to match the fiscal year end. We produce TTM figures for things like earnings, earnings per share (EPS), price-to-earnings (P/E) ratio, and yield.

Key Takeaways on TTM

Trailing 12 months is simply the data from the past 12 consecutive months used for financial reporting. A company's TTM doesn't usually align with its fiscal year end. It offers you a balance that's both up-to-date and adjusted for seasons. By regularly checking these trailing numbers, you can evaluate company financials internally or externally, no matter when the fiscal year closes. TTM helps compare performance trajectories by smoothing out inconsistencies.

Understanding Trailing 12 Months (TTM)

As an analyst or investor, you use TTM to break down various financial data, including balance sheets, income statements, and cash flows. The way you calculate TTM can vary between statements. In equity research, some report earnings quarterly, others annually, but if you're after daily stock prices or current data, TTM measures are more relevant since they're timely and seasonally adjusted.

You can also use TTM to figure out financial ratios. For example, the price/earnings ratio is often the P/E TTM, which is the current stock price divided by the trailing 12-month EPS. Fundamental analysis often compares a metric to a prior one to see growth. Say a company hits $1 billion in revenues—that's impressive, but it's even more so if it jumped from $500 million in the last 12 months, showing a clear growth path.

Tip for Using TTM Metrics

Here's a straightforward tip: use TTM financial metrics to compare different companies. For accuracy, make sure you're looking at figures from companies in the same industry.

Where to Find Trailing 12-Month (TTM) Measures

You'll typically find the 12-month measure on a company's balance sheet, updated quarterly to meet GAAP standards. Some analysts average the first and last quarters. For cash flow items like working capital, capital expenditures, and dividends, treat them based on the source statement. Working capital comes from averaged balance sheet items, while depreciation is from the last four quarters on the income statement.

Trailing 12-Month (TTM) Revenue

TTM revenue is what a company earns over the trailing 12 months. This helps you see if there's real top-line growth and where it's coming from. Often, it's overshadowed by profitability or EBITDA. To calculate it, add the previous four quarters of revenues. For instance, if XYZ Corp. had $29.4 billion in Q1, $33.5 billion in Q4, $30 billion in Q3, and $21.9 billion in Q2, the TTM revenue is $29.4 + $33.5 + $30 + $21.9 = $87.8 billion.

Trailing 12-Month (TTM) Yield

For mutual funds or ETFs, TTM yield is the percentage of income returned to investors over the last 12 months, calculated as the weighted average of the yields from all holdings, like stocks, bonds, or other funds. It can also mean a stock's dividend yield over the prior 12 months. If a $100 stock paid $0.10 quarterly dividends for four quarters, the TTM yield is 0.4%, or (0.10 + 0.10 + 0.10 + 0.10) ÷ $100.

Trailing 12-Month (TTM) Price/Earnings Ratio

TTM examines the trailing P/E ratio of a stock, a relative valuation based on the last 12 months of actual earnings. Calculate it by dividing the current stock price by TTM EPS. This contrasts with forward P/E, which uses projected earnings.

How Do You Calculate Trailing Twelve Months (TTM)?

Calculations for trailing 12 months depend on the metric. Generally, you either sum the figures from the previous 12 months or four quarters, or take an average or weighted average of them.

Do Last Twelve Months and Trailing 12 Months Mean the Same Thing?

Yes, last 12 months (LTM) is just another name for trailing 12 months. Both cover the company's financial performance over the previous 12 months.

What Is a Trailing 12 Months Profit & Loss?

TTM P&L tracks how an investment or project performed over the prior 12 months. It uses monthly or quarterly returns to report a weighted average profit or loss.

The Bottom Line

Trailing 12-month figures report metrics on a rolling basis from the last 12 months or four quarters. Besides spotting recent trends or annual performance, you use TTM to compare similar companies in an industry or sector. Common metrics include sales, stock returns, dividend yield, P/E ratio, and EPS.