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What is last twelve months (LTM)?

LTM stands for “last twelve months”. Another common term is “trailing twelve months” or “TTM”.

In both instances, these means the 12 months of financial results, regardless of what the company’s calendar year-end or fiscal year-end. LTM is important because it allows a company to compare year-to-date results to prior years.

As you can see in the example below, we would calculate LTM Q1-21 by summing Q2-20, Q3-20, Q4-20, and Q1-21. We’re essentially replacing Q1-20 with Q1-21, and that allows us to compare the last four quarters ending Q4-20 to the last four quarters ending Q1-21.

One of the main benefits of calculating LTM is that it still includes 12 months of historical financial information, so any seasonal trends would still be factored in.


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