Last Twelve Months (Ltm)

Last Twelve Months (LTM) What is LTM? Last Twelve Months (LTM), also called Trailing Twelve Months (TTM), is a rolling 12‑month period used to evaluate a company's recent financial performance. LTM figures typically aggregate the most recent four quarters (or the 12 months ending on the date of a financial statement) to present current metrics such as revenue, earnings, and dividend yield. Why use LTM?
* Captures the most recent business performance while smoothing seasonal effects.
* Excludes older data that may no longer reflect current operations.
* Provides updated metrics between quarterly and annual reports, which is useful for timely analysis and valuation.
Common uses
* Valuation ratios (e.g., P/E using LTM earnings).
* Comparing peer companies within the same industry.
* Assessing dividend yield over the past year (often compared with SEC yield).
* Due diligence for mergers and acquisitions, where recent performance gives a better sense of current value than the latest fiscal‑year numbers.
How LTM is calculated Basic approach:
* LTM = sum of the most recent four quarters (e.g., Q1 + Q2 + Q3 + Q4). Explore More Resources

Alternative for overlapping fiscal periods:
If using year‑end financials plus quarterly updates, adjust by adding the most recent interim quarter and subtracting the corresponding quarter from the prior fiscal year to avoid double‑counting. Example:
Quarterly revenues of 50, 60, 55, 65 → LTM revenue = 230. Explore More Resources

Practical considerations and limitations
* One‑time items: LTM can include nonrecurring gains or losses that distort the trend—adjust metrics for one‑offs when necessary.
* Structural changes: Recent acquisitions, divestitures, or business shifts may make LTM less representative of future performance.
* Restatements and accounting changes can alter LTM comparability across periods.
* LTM is not a substitute for forward‑looking projections; combine it with forward estimates and normalized adjustments for valuation or forecasting.
Key takeaways
* LTM provides a timely, seasonally adjusted view of recent financial performance by aggregating the most recent 12 months.
* It’s widely used for valuation, peer comparison, dividend assessment, and transaction analysis.
* Always check for one‑time items, structural changes, and accounting adjustments when relying on LTM figures.