Many finance websites list TTM financials to show investors the most up-to-date numbers. For example, revenue and EPS may be displayed as "Revenue ttm " and "EPS ttm " to show that the figures are for the trailing past 12 months. When you see TTM in relation to yield, it implies that the numbers use information from the last 12 months. A TTM dividend yield is calculated by adding up the dividend from the last four quarters, then dividing by the current stock price.
A forward dividend yield estimates what the dividend will be in the next four quarters, or simply multiples the most recently announced quarterly dividend payment by four. If you want to know how much a company has grown in the past year, then you can divide the latest TTM numbers by the numbers in the preceding month period. For example, if the trailing twelve months were Q4 of and Q1-Q3 of , then you can divide that TTM number by Q4 of and Q1-Q3 of to see the annualized growth or decline.
Using TTM figures, you can see a full year of up-to-date financials at any point in the year. Alternative method There is an alternative method to calculate TTM, but it is slightly more complicated than simply adding up the last four quarters. You might be using an unsupported or outdated browser. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website.
Trailing 12 months TTM is a way of looking at the performance of a public company or a security over the last 12 months. Financial news outlets commonly present TTM figures to show investors the most up-to-date numbers on companies and securities. The abbreviation TTM is a measure of data over a month period in the past. TTM is a highly flexible tool that can be applied to balance sheet figures, profit-and-loss statements, revenue and cash flow charts.
Just remember, the month period referred to by any given TTM data differs from one financial statement to the next. Equity research analysts spend plenty of time pouring over quarterly and annual earnings reports, which unlike TTM measures are tied to the calendar quarter or calendar year.
TTM can be applied to a wide range of financial data. TTM is especially useful in evaluating things like working capital, revenue growth and profit margins, which may fluctuate throughout the year depending on seasonal factors. Public companies release financial reports on a quarterly basis in the form of securities filings. The part of these filings containing the financial statements features trailing month metrics, updated quarterly per GAAP or generally accepted accounting principles.
TTM is useful as a clear standard, since sometimes firms will provide monthly statements detailing sales volumes or performance indicators, whereas Securities and Exchange Commission SEC filings present quarterly or YTD financials. Then, simply go back and add on the three preceding quarters. Here is an example of the trailing 12 months revenue for a company if the most recently completed quarter of a company is Q1 of 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.
Earnings per Share , or EPS, is valued by analysts as a key indicator of the overall profitability of a company. It is calculated by dividing the net income of a company by its available shares. The trailing 12 months of Earnings per Share can show how a company is maintaining its profits over a sustained period of time. 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.
I'm going to highlight that. Then you would take the last year, the complete fiscal year. Then you would subtract last year's year to date period. I'm going to unhighlight last year's Q1 and Q2. The result is that I get the last four quarters or the last 12 months, as you can see here, I have the last four quarters.
Now let me explain the common mistake that people would make. They would say, instead of the year to date period, let me take the latest quarter, which is OK only in Q1, but this is Q2. So let's say we made that mistake. I took the latest quarter, then I took the last year's complete fiscal year.
And then I subtracted last year's quarter, the equivalent quarter last year. As you can see, that would not get us the last four consecutive quarters. That is incorrect. That's a common mistake that people make. They don't use the year to date. Instead, they use the latest quarter.
Now, in Q2 and Q3, that would lead to a major mistake. And you don't want to make that mistake. Now, one other question to note here before we get into examples.
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