In finance, TTM stands for trailing twelve months, and it represents a company’s financial performance in the last 12 consecutive months. For example, if a company financial statement is created on August 1, 2022, then the TTM financial report and the dollar values used to prepare the statement will be created using the trailing twelve months from August 1, 2021 to July 31, 2022.
Using the TTM (trailing 12-month) data analyzes the recent financial data in a rolling annualized format. Previous 12-month data helps neutralize the effects of recent monthly seasonality and smooths out non-recurring events in financial results by averaging data over a longer time period. Short term changes in supply, demand, one-time expenses, or out-sized sales can be averaged out over a 12-month time range.
TTM enables financial analysts to contrast current monthly or quarterly data results against the average previous annual results. TTM shows the previous 12-months results not just the previous calendar year information. TTM charts aren’t used for identifying long-term trends not short-term changes but the TTM can be used for trend identification and forecasting.
- TTM is the past twelve consecutive months of a company’s financial data including sales, revenue, profits, and earnings performance used for reporting by publicly traded companies.
- Evaluating trailing 12-month company financials can show a current trend without needing to wait for the artificial fiscal year-end reports.
- TTM shows the current financial trend and performance trajectory by averaging out recent monthly inconsistencies.
TTM is used by investors to quantify fundamental trends in companies to help make investing decisions based on the quality of the data.
