A company’s fiscal year is a natural time period to consider when analyzing its financial performance. However, relying only on the company’s most recent completed fiscal year is not optimal if that data is old and interim results have been published. To solve this problem, it is common to calculate financial results for the time period known as the Last Twelve Months (LTM) period, sometimes also referred to as the Trailing Twelve Months (TTM) period.
The LTM period covers the four most recent fiscal quarters (or two fiscal semesters) for which financial information is available. LTM financials are calculated adding the numbers of the full fiscal year and the most recent partial period, and then subtracting the numbers for that same time period from the year before.
LTM financials are especially useful when comparing companies in the same industry but with different fiscal year ends.
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