Simply put, the Trailing Twelve Months (TTM) - or sometimes Last Twelve Months (LTM) - is the 12 months preceding a "cut off" date. As part of your valuation process we will frequently request TTM data for your financial statements.
For our purposes, we almost always ask for the TTM period on the LAST day of the most recently closed month. Here is what the periods look like for FY21... and the dates you would use to pull financials.
NA =Full Year
NA =Full Year
TTM helps us get a current view point on the company's performance. Additionally:
TTM Helps us compare performance to prior, full year's performance (for example, comparing 5 months of this year's earnings to the full year last year is not meaningful)
TTM is considered useful in assessing the most recent business performance indicative of the company’s current trend
It's figures are more current than the fiscal or annual financial statements, which helps to avoid potentially misleading short-term measurements >> Much more so than simply annualizing a partial year performance!
It is useful for comparing the relative performance of similar companies within an industry or sector
The LTM time frame is sufficient to provide analysts and investors with financial metrics that are not inappropriately influenced or distorted by factors such as seasonality or brief market or economic turndowns.