Theoretically, TTM is the acronym for trailing 12 months. This is a financial term describing company’s performance data in 12 consecutive months. The use of TTM is to report financial figures. But this is to note that the 12 months research and calculation is different from a fiscal year ending period. Fiscal year-end, on the other hand is the completion of a 12 month period accounting report other than a typical calendar year. So, a fiscal year would be more into the use of the annual financial statement’s calculations. Different from Fiscal year-end, TTM figures use a variety of metrics involving earnings, EPS, P/E, and yield.
The purpose of TTM for both analysts and investors is to dissect a wide swath of financial data. This is because financial data covers largely about balance sheet figures, income statements, as well as cash flows. This is to note that the TTM calculating method is distinctive from other financial calculations. For example in equity research, analysts tend to use quarterly report earnings. But others might use different methods, or they may use or do it annually. However, many investors find that TTM is more relevant as it could define the stock price current data. This is because it is more recent and adjustable.
Moreover, the figures of it could calculate financial ratios. This ratio could also refer to P/E (TTM and calculate the stock’s current price. This is divided by a company’s trailing 12 months EPS or earnings per share. Many specific analyses would involve the comparison of measurement against the prior term. This is to interpret how much growth in the stock.
