TTM

What is Trailing Twelve Months (TTM)?

Trailing Twelve Months, or TTM, is a financial measure that shows a company’s performance over the last 12 months. It gives a more current picture than yearly reports because it updates each month.

Why does it matter?

TTM helps investors and managers see real trends in revenue, profit, or cash flow. It smooths out seasonal changes and gives a clearer view of current performance and business health. Without it, companies risk making decisions based on outdated data.

Why does it matter?

For a small business owner, recurring revenue is important because it stabilises cash flow, reduces the pressure to constantly find new customers, and makes the value of the business clearer. Without it, income becomes more unpredictable, forecasting gets harder, and growth is more difficult to achieve.

Where to apply it? In which business process?

TTM is used in financial analysis, valuation, budgeting, and performance tracking. It’s key for forecasting, comparing with competitors, or presenting financial data to banks and investors.

How to apply?

Add the company’s last four quarterly results:
TTM = Q1 + Q2 + Q3 + Q4 (latest 12 months).
You can calculate TTM for revenue, EBITDA, net income, or any other financial metric.

Conclusion:

TTM shows the most accurate and up-to-date financial picture. It helps make better business and investment decisions by focusing on the last year’s real results.

FAQ:

• What’s the difference between TTM and annual reports? → TTM updates monthly; annual reports cover a fixed year.
• How often is TTM used? → Often in valuations and trend analysis.
• Can startups use TTM? → Yes, once they have 12 months of data.
• What’s the benefit? → Shows true current performance.
• Is it used in stock analysis? → Yes, for P/E and revenue ratios.

Keywords: TTM revenue, rolling 12 months, financial performance, trailing data, annualized results, EBITDA TTM, cash flow TTM, trend analysis, business valuation, forecasting

Examples:

• An investor compares two companies’ TTM revenue to see growth trends.
• A CFO uses TTM EBITDA to assess loan eligibility.
• A startup tracks TTM cash flow to measure progress since launch.

Articles:

• Financial Forecasting Basics – https://excellentbusinessplans.com/financial-forecasting-basics
• Business Valuation Explained – https://excellentbusinessplans.com/business-valuation-explained
• Cash Flow Management – https://excellentbusinessplans.com/cash-flow-management

Templates:

• Financial Plan Template – https://excellentbusinessplans.com/businessplan-templates/financial-plan
• Investor Pitch Plan – https://excellentbusinessplans.com/businessplan-templates/investor-pitch

Recommended Book

• Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean – https://www.amazon.com/dp/1422144119