Trailing 12 Months
Candlefocus EditorUsing TTM enables investors to take a snapshot of company performance in a given period and compare that to their performance over the preceding year on a consistent basis. It is specifically useful for companies with uneven financial quarters due to seasonal patterns or major events. In that case, TTM smoothes out any short-term fluctuations and provides a more realistic picture of the company’s financial trajectory.
Within the company, TTM data enables efficient analysis of internal financial performance. For example, TTM snapshot data can be used to compare current performance against the prior periods performance. It enables easy monitoring of the performance of the business in relation to the budget, as well as tracking progress towards strategic goals. It also allows managers to check the results of key products, markets and territories.
From an external perspective, TTM can help investors assess the financial performance of a company more effectively. For example, analysts may use TTM data to compare the performance of different companies in the same time period. Similarly, investors may use this data to decide whether to invest in a particular company since the risks and opportunities inherent in the business can be more clearly identified in comparison to past results.
In conclusion, Trailing 12 Months (TTM) is a vital tool in the financial analysis of companies. By enabling investors and company’s to take a snapshot of their financial performance over the last 12 consecutive months, TTM smoothes away inconsistencies and provides a more reliable picture of company performance. This ultimately allows for more effective analysis and comparison of a company’s financial trajectory.