TTM Calculator – Trailing Twelve Months

The amazing trailing twelve months TTM calculator helps you determine any last twelve-month financial value. In this article, we will cover what TTM means in text, how to interpret revenue TTM or EPS TTM, among others, and include a real-life TTM stock valuation as an example.

Public companies usually present results four times a year: 1st quarter, 2nd quarter, 3rd quarter, 4th quarter. The last quarter report is followed by a full-year report called the "annual report" which includes the results of the whole fiscal year.

Once you have the yearly values, it is easy to compare year-over-year financial metrics, but what to do if you are in the middle of the year with only the 2nd quarter report available?

Then you use the last twelve months' information. The trailing-twelve-month value (TTM) represents the previous four quarters counting back from the last report you have. For example, if the 2nd quarter 2021 report was just released, TTM values will include such information from the 1st quarter 2021, the 4th quarter 2020, and the 3rd quarter 2020.

The main reason why we need to understand this topic relies upon the necessity to track our investments through the year and decide if you want to buy the stock, do dollar cost average for reducing your initial cost basis, or sell your position because financial fundamentals do not hold anymore.

Thus, the TTM calculator we created for you has six modes of operation: the very first one is for any TTM value, and the other five are for the most famous TTM metrics:

• TTM EPS;
• TTM revenue;
• TTM PE ratio;
• TTM yield; and
• Enterprise value to TTM EBITDA multiple.

Please keep reading to check how to use them all.

First, we will review the formula. Let's use the revenue TTM equation for the explanation.

Here, Rev_t represents the last quarterly available value for the revenues of the company. Rev_t-1 represents one quarterly period behind the last reported. Rev_t-2 and Rev_t-3 represents two and thee quarterly periods behind the last reported respectively. Consequently, revenue TTM includes the last four available reported quarterly revenues.

Now that we understand the TTM meaning in text and using math, we will check how to use it in our TTM calculator:

1. Select the TTM mode. Let's say you choose Enterprise value to EBITDA TTM from the five available options. For more information about EBITDA, please check the EBITDA calculator
2. Add the current enterprise value.
3. Add the last four quarterly EBITDA recorded values.
4. Enjoy the result of our TTM calculator: EV to TTM EBITDA multiple.

Finally, you can use the general TTM mode to calculate any financial cumulative financial metric such as EBITDA margin.

The importance of the TTM in finance relies on the fact that the companies report results over the year, and such results impact the stock price. For example, let's suppose EPS growth decreases. Then investors could start considering that the current price to earnings ratio is too high, and the stock price might drastically drop.

If you are not aware of trailing twelve-month values when new reports come, you could be left holding a stock that nobody wants and get a loss. Consequently, we are going to cover the most famous TTM metrics:

1. TTM Revenue: Consists of the sum of the revenue reported on the last four quarters. Useful to keep an eye on, so you can constantly update your sales-related valuation metric in the price to sales ratio calculator.

2. TTM EPS: Includes the last four quarter reported earnings per share. Once having the TTM EPS, you will be able to compare year over year to analyze its growth.

3. TTM PE: Includes the last four quarter reported earnings per share but compares it to the most recent price per share. Remember:

   $\footnotesize \rm {PE \ ratio = Price / TTM \ EPS}$

   Then, you know how much the stock costs for 1 dollar generated of EPS in the last twelve months.

4. EV / EBITDA TTM: It considers the current enterprise value and divides it by the last four quarterly reported EBITDA. It indicates how many dollars a parent company would pay for acquiring the business related to one dollar generated of EBITDA.

5. TTM yield: In this category, we find many ratios that indicate a return to the stockholder over the price they pay. For example, the free cash flow yield and the dividend yield.

   $\footnotesize \rm {FCF \ yield = TTM \ FCF \ per \ share / Price}$

   $\footnotesize \rm {Dividend \ yield = TTM \ dividend \ paid \ per \ share / Price}$

As a side note about dividends, use the dividend yield calculator to check how much you are going to be paid depending on the amount of shares you have.