Financial Glossary
Last Twelve Months (LTM)
Last Twelve Months (LTM), also called Trailing Twelve Months (TTM), is a rolling financial measurement period covering the most recent 12 consecutive months of data as of a specific date, regardless of fiscal year boundaries. LTM figures are calculated by taking the most recent full fiscal year's results, adding the current year-to-date figures, and subtracting the comparable prior-year-to-date figures. LTM is used in valuation (applying revenue or EBITDA multiples), lending covenants, M&A due diligence, and performance benchmarking because it reflects the most current operating reality rather than a potentially stale fiscal year snapshot.
Problem & Application
An acquirer is evaluating a campground business whose fiscal year ends December 31. Due diligence occurs in October, so the most recent annual statements are 10 months old. Using only those financials would exclude a strong summer season and misrepresent current performance. Calculating LTM through September corrects for this: LTM Revenue = FY Revenue + Jan-Sep Current Year Revenue - Jan-Sep Prior Year Revenue. If the campground had $1.8 million in FY revenue, added $1.6 million in Jan-Sep of the current year, and had $1.4 million in Jan-Sep of the prior year, LTM Revenue = $1.8M + $1.6M - $1.4M = $2.0 million. Applying the acquisition multiple to the LTM figure rather than the stale annual figure produces a valuation that reflects the business as it exists today.
In Short
LTM is a valuable metric for understanding the true financial performance of a business over a 12-month cycle.
How it works
Mechanically, the standard bridge formula is LTM = Most Recent Fiscal Year + Current Year-to-Date − Prior Year-to-Date Through the Same Stub Period, which "rolls forward" an audited annual figure to a more recent cutoff without waiting for the next year-end close. In practice, analysts apply LTM to flow metrics that accumulate over time (revenue, EBITDA, net income, free cash flow), not to balance-sheet items like cash or debt, which are already point-in-time as of the measurement date. The most common misunderstanding is treating LTM as a simple calendar year or as the last four reported quarters added blindly; it must align to a specific cutoff date and strip out the overlapping prior-year stub, or the period will double-count or omit months.
Calculating LTM EBITDA for a short-term-rental portfolio
A short-term-rental operator with a December 31 fiscal year-end wants LTM EBITDA as of June 30 to refinance a loan. The lender will not accept the stale prior FY alone. Using the bridge formula: FY (full prior year) EBITDA was $900,000. Current-year January–June EBITDA is $620,000, reflecting a strong spring booking surge. The comparable prior-year January–June EBITDA was $480,000. LTM EBITDA = $900,000 + $620,000 − $480,000 = $1,040,000. Notice the math removes the prior-year first half (already inside the $900,000) and replaces it with the stronger current-year first half. The result, $1.04 million, captures the most recent twelve months ending June 30 rather than a six-month-old snapshot. At a 5x EBITDA valuation multiple, this raises implied enterprise value from $4.5 million (stale FY) to $5.2 million, a difference that directly affects loan sizing and any sale negotiation.
Frequently asked
What is the difference between LTM and YTD?
YTD (year-to-date) measures performance from the start of the current fiscal year through a cutoff date, so it covers a partial year that resets each January. LTM always spans a full, fixed twelve months ending on that same cutoff date. LTM is more useful for valuation and comparison because it eliminates seasonality and partial-period distortion that YTD figures carry.
Is LTM the same as trailing twelve months (TTM)?
Yes. LTM (last twelve months) and TTM (trailing twelve months) are interchangeable terms for the identical concept: the most recent twelve consecutive months of financial data as of a given date. Investment bankers and private-equity professionals tend to say LTM, while public-equity analysts and stock-screening tools more often use TTM. The calculation and meaning are exactly the same.
Can you calculate LTM for balance sheet items?
No. LTM applies to flow items that accumulate over a period, such as revenue, EBITDA, and cash flow. Balance-sheet figures like cash, debt, inventory, and equity are already point-in-time snapshots, so you simply use the balance as of the measurement date. Mixing an LTM income figure with a current balance is standard, for example in LTM-net-debt-to-EBITDA leverage ratios.