Overview

LTM stands for last twelve months or trailing twelve months. LTM revenue is frequently used by finance professionals to measure a company's financial performance because it averages out the effects of seasonality, occasional events, and any factors that would skew a periodic data point. Analysts use LTM figures for several reasons:

  • LTM looks at the most recent business performance which reflects a company's current trend.
  • LTM avoids short-term measurements that are uncommon for the business.
  • LTM figures can be used to compare similar companies in an industry.
  • LTM provides a relevant calculation of valuation metrics such as the P/E ratio.
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