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TTM Meaning (All You Need To Know)

What does TTM mean?

How do you define TTM in simple terms?

What’s essential to know?

Keep reading as I have gathered exactly the information that you need!

Let me explain to you what is TTM in finance once and for all!

Are you ready?

Let’s get started!

What Does TTM Mean

In finance, TTM is an acronym for “Trailing Twelve Months” representing a measure of financial data spanning the last twelve months.

Many investors and finance professionals like to assess company financial data in a trailing 12-month format because it provides a good average, allowing a more accurate determination of financial performance.

If the TTM is not used, then the financial data may be skewed due to seasonal events, non-recurring events, or short-term market changes that may distort an investor’s financial calculation.

When considering a longer reference period spanning the past twelve months, then any market abnormality or non-recurrent events will be somewhat neutralized allowing more accurate analysis of financial data.

The TTM does not necessarily correspond to a company’s fiscal year.

Rather, the trailing twelve months consider the past twelve consecutive months, whatever they may be.

TTM Definition

How do you define TTM in simple terms?

In business, TTM is a term used to refer to the Trailing Twelve Months.

Here is the definition of TTM:

Using trailing 12-month (TTM) figures is an effective way to analyze the most recent financial data in an annualized format.
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In other words, TTM is a 12-month reference period starting from the current period and going back in time for 12 months.

TTM Revenue Meaning

TTM financial reporting is very important for many companies looking to accurately forecast various financial metrics.

Companies tend to use TTM financial reporting to assess their profitability, growth, expenses, and other business financial metrics.

Regularly assessing company revenues on a trailing twelve months, a company is able to truly assess how its business is doing without possible distortions in the figures due to seasonality or short-term changes in market conditions.

TTM Yield Meaning

TTM yield is generally used to evaluate mutual funds and exchange-traded funds’ financial performance.

When looking at the TTM yield, you are looking for the percentage of income that a mutual fund or ETF portfolio has returned in the course of the last twelve months.

Stock TTM Meaning

When analyzing stocks, investors and analysis look at the TTM of stock to see how the stock has performed in the course of the last twelve months.

By looking at the stock price on a trailing twelve months, you can see how the stock has performed in the course of the last year allowing you to get a better perspective of the stock’s performance.

In every given year, public companies file four quarterly reports and one annual report.

When looking at the TTM of stock, you factor in the stock price movement resulting from the company’s release of its last four quarterly statements.

TTM Acronym Meaning

What does the acronym TTM stand for in finance?

In finance, TTM stands for “Trailing Twelve Months” which is a way that investors and analysis may assess financial data.

For example, if an investor wants to see a company’s earnings, instead of looking at the company’s latest earnings in their financial statements, he or she may prefer to look at the TTM earnings to get a better sense of the earnings on an annualized basis.

TTM Finance Example

Let’s look at an example of how you may use TTM in your financial data analysis.

Imagine that a company has the following revenues in the last four quarters:

  • Q1: $100,000,000
  • Q2: $50,000,000
  • Q3:$40,000,000
  • Q4: $110,000,000

As you can see, the company tends to have high revenues in Q1 and Q4 whereas Q2 and Q3 appear to be quite low (this suggests seasonality in the business).

By looking at the TTM earnings, you’ll look at the total of the last four quarters giving you a total of $300,000,000.

However, if you are in Q3 and evaluating the company’s earnings, you may feel that the company is underperforming.

Similarly, if you are in Q4 and evaluating the company earnings, you may feel that the company is doing better than in reality.

What Is TTM Takeaways 

So there you have it folks!

What does TTM stand for?

What does TTM mean in finance?

In business and finance, you can define TTM to be “Trailing Twelve Months”.

Trailing Twelve Months (or TTM) is a term used to refer to a period for assessing financial data or the reporting of financial data.

For example, a company may report revenues, expenses, and its financial data on a TTM basis which means that it considers the past twelve months in its reporting.

On the other hand, an investor may look at the trailing twelve months’ performance of a stock, or TTM yield of a mutual fund, to assess the stock’s performance.

Instead of using the last fiscal year as a reference point or possibly the most recent quarter in a calendar year, using TTM will provide a more accurate view of the financial data for companies and investors.

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Now, let’s look at a summary of our findings.

What Is The Meaning of TTM In Finance

  • TTM is a phrase used to refer to the previous twelve consecutive months of a company’s financial data 
  • TTM accounts for seasonality and non-recurring events that may affect a company’s financial data in the short-term
  • TTM is very often used by public companies in their balance sheet and income statements 
  • TTM is used by investors and financial analysis to evaluate the performance and returns of investment instruments over the past 12 consecutive months 
Annual statement 
Audited statement 
Balance sheet 
Cash flow statement 
Equity definition
GAAP definition
Income statement
KPI definition
Last twelve months 
Price-to-sales
Quarterly statement
Retained earnings 
Rolling returns
Stock definition 
Yield definition
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Annual revenue 
Capital expenditure 
Cash flow from operations 
Cash flow 
Cost of goods sold 
Depreciation 
EPS definition
FICO score
Fiscal year 
Free cash flow 
Inflation 
Net income
Price to earnings 
Quarterly revenue
Stock split
Author
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Hello Nation! I'm a lawyer by trade and an entrepreneur by spirit. I specialize in law, business, marketing, and technology (and love it!). I'm an expert SEO and content marketer where I deeply enjoy writing content in highly competitive fields. On this blog, I share my experiences, knowledge, and provide you with golden nuggets of useful information. Enjoy!

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