What is the Trailing 12 Months?

Trailing 12 months (TTM) is a metric that allows one to carry out a full year worth analysis of a company's financial performance. TTM represents the data reporting the financial figures of an entity for a fiscal year which is the period of 12 months. It is an effective way to examine the most recent financial data for one year. Although, TTM does not necessarily represent the end of a fiscal year, it x-trays the financial performance of a company for a period of 12 months. This is done through the measurement of a company's income, expenses, cash flow and balance sheets.

How is the Trailing 12 Months Used?

Trailing 12 months (TTM) reports the financial figures of a company for the period of 12 months. This financial report helps in measuring the financial growth or retardation that a company experiences over time. It compares previous financial reports with the current one. For instance, an improved or increased revenue suggests that the company has experienced a degree of growth as compared to prior times. It is also used for the calculation of financial ratios. It calculates a firm's price or earnings ratio; P/E (ttm), which is the stock's current price divided by a company's trailing 12-month earnings per share (EPS). Trailing 12 months (TTM) presents an annual financial data or report of a company, this is seen to provide investors with a compromise that is both current and seasonal. This type of report does not contain present financial data, it is therefore not current. Annual reports such as TTM fail to capture certain financial measures that change on a daily basis. Because it gives a full year earning report, changes in earnings such as stock price and others are not included. Even earning reports given by analyst in every quarter is not a holistic approach of measuring financial changes that occur daily. Financial analysts give financial reports monthly, quarterly and annually, these reports are however updated periodically. TTM is a list of the balance sheet which include a company's income, revenue, expenditures among others. The rate at which financial reporting or analysis is to be made and released is largely dependent on the decisions of financial analysts. Line items as contained on a company's balance sheet make up the data for TTM. This also include dividends, working capital, revenues and capital expenditures.