Why Trailing Twelve Months TTM Is Important in Finance

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It is a common financial metric used by investors to analyze various aspects of a company’s financial performance, such as earnings, revenue, and valuation ratios. In the world of texting and digital communication, TTM carries a different meaning altogether. In another context, TTM stands for “trailing 12 months” a widely used term in the financial world, referring to the data from the past 12 consecutive months for reporting a company’s financial performance. Trailing twelve months figures are generated using the last interim or quarterly report a company has issued before the date in question. The trailing twelve months (TTM) refers to a company’s financial performance in the most recent 12-month period. TTM revenue (sales) and profitability metrics show how much money the company brought in and earned over the previous one-year period, regardless of which quarter’s financial statements are being released.

Musician Lil Nas X, for example, often uses TTM in his captions, asking his followers to share their thoughts and feelings about his new music. Many influencers, bloggers, artists, and even authors incorporate TTM into their content on Instagram. For example, as a beauty influencer, you could use ‘TTM” in the comments section to ask your followers about their favorite makeup brands. It can be an effective acronym to foster a sense of authenticity, and strong connection and encourage followers to engage in honest dialogue.

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That could happen because the company’s TTM figures are still negative, even though it had a good quarter. Investors will be more likely to buy the stock if they know the company’s TTM figures are positive. The company is stuck in a « show-me » pattern, where analysts and investors are more interested in seeing improving long-term trends than in seeing the ins-and-outs of any particular quarter.

• The acronym “TTM,” which stands for “Talk to Me,” has become the most widely used and popular slang term among the Gen Z (the digital native generation).
• The longer-term view of a company’s performance often carries more weight than sudden changes in a single report.
• Christina frequently engages with her audience via Instagram posts and the hashtag TTM, asking and addressing how she has “uncomfortable conversations with kids” and soliciting answers from her followers.
• These evaluations can include calculating key performance indicators such as net profit margin or liquidity.

Less frequently, firms provide monthly statements with sales volumes or key performance indicators. The price/earnings ratio is often referred to as P/E (TTM) and is calculated as the stock’s current price divided by a company’s trailing 12-month earnings per share (EPS). The price/earnings ratio is often referred to as P/E (TTM) and is calculated as the stock’s current price, divided by a company’s trailing 12-month earnings per share (EPS). Trailing 12 months (TTM) is a term used to describe the past 12 consecutive months of a company’s performance data, that’s used for reporting financial figures. The 12 months studied do not necessarily coincide with a fiscal-year ending period.

What does TTM mean on Snapchat?

In the equity research space, some analysts report earnings quarterly, while others do so annually. But investors who seek daily information about stock prices and other current data may look to TTMs as more relevant ttm stands for measures, because they’re more current and are seasonally adjusted. In effect, a metric on a trailing twelve months basis, such as TTM revenue, is meant to show the current state of a company’s growth trajectory.

The articles and research support materials available on this site are educational and are not intended to be investment or tax advice. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. This does not have to correspond to the end of a quarter or a fiscal year while remaining annualized, accounting for seasonality or short-term abnormalities in things like supply, demand and operating costs. The formula for TTM revenue is simply to add up the previous four quarters of revenues to date.

For instance, if a company has positive TTM earnings, that indicates that the company’s after-tax income is greater than its operating expenses, resulting in a net profit over a yearlong accounting period. If a company’s TTM figures are negative, the company is spending more money than it’s making. Considering TTM values instead of a single quarter smooths out seasonal effects and gives less weight to unique, one-time items.

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Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only.

The process of adjusting a financial metric like revenue by adding the most recent period past the latest reported fiscal year and subsequently deducting the matching period is referred to as the “stub period”. This TTM equation is often easier for analysts to perform and provides a better look at year-over-year data for a certain period of time. TTM accounts for both seasonality and other time-specific effects on a company’s operation that could have a greater effect on a short-term financial analysis.

How to Calculate TTM

Like many other social media and messaging platforms, Snapchat is full of different slang terms and acronyms that make it quicker and easier to talk to people on the app.. TTM and other similar slang have gained widespread use over time on social media platforms such as Instagram, Tiktok, and Snapchat, giving rise to a new form of communication. It is especially handy because it can provide more recent data tied to a certain point in time.

• A financial professional will offer guidance based on the information provided and offer a no-obligation call to better understand your situation.
• TTM stands for “trailing twelve months” and is a backward-looking metric that captures the financial performance of a company in its latest four reporting quarters.
• It cannot determine profit, a company’s ability to turn said profit, or its capability to generate gross revenue.
• That could happen because the company’s TTM figures are still negative, even though it had a good quarter.

It is thought to have originated in the hip-hop community, where slang terms are commonly used to express ideas and feelings. Although this is mostly used to invite people to communicate,  engage and hold a conversation, it is also used as a way to show vulnerability and seek emotional support from others. Our mission is to empower readers with the most factual and reliable financial information possible to help them make informed decisions for their individual needs.

Trailing 12 Months FAQs

This number is calculated by taking the weighted average of the yields of all holdings housed within a fund, whether they be stock, bonds, or other funds. The trailing 12 months of Earnings per Share can show how a company is maintaining its profits over a sustained period of time. Analysts often utilize TTM data as it is the best way to take an annualized view of the performance of a company over a sustained period of time.

This acronym is not exclusive to any particular messaging platform and can be seen in texts, social media, and other online communication platforms. The prior fiscal year may be used instead of the trailing twelve months, but using the trailing twelve months allows for more up-to-date financial metrics. Additionally, the TTM data of EPS is a key factor in determining a company’s price to earnings ratio, which shows how profitable each individual stock of a company is.

TTM P&L keeps a running tab of how well an investment or project has performed over the prior twelve-month period. It takes the monthly or quarterly returns over that time period and reports a weighted average profit or loss figure. Analysts and investors use TTM to dissect a wide swath of financial data, such as balance sheet figures, income statements, and cash flows. The methodology for calculating TTM data may differ from one financial statement to the next.

For example, a company in the retail industry might see a lot of seasonal effects in its revenue development, while a company in the tobacco industry might not. Target’s single-quarter sales are frequently larger in the holiday-flavored fourth quarter, while Altria customers don’t tend to change their buying habits very often. The required financial filings to perform such a calculation are the company’s latest 10-K, most recent quarterly filing(s), and the corresponding filings from the year prior.