Why Do Businesses Use TTM in Financial Statements?

TTM stands for 'tralling 12-month', and this means a record of the past 12 consecutive months, of a company's performance data which is further used to report its financial figures after the year is complete. With the help of TTM, companies can evaluate their financials both internally, as well as externally, even without the completion of the fiscal year. Some famous companies and brands which use TTM are Zee Entertainment Enterprises Ltd., Birla Corporation Ltd., Voltas Ltd., Hitachi Energy India Ltd., Lemon Tree Hotels,. etc. The formula of calculating the TTM revenue is:

TTM Revenue = Current Quarter Earnings + Quarter 1 Earnings + Quarter 2 Earnings + Quarter 3 Earnings

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TTM (Trailing Twelve Months) helps businesses gain a better, more recent understanding of how well the business performed over the last 12 months by removing seasonal variations. It allows improved comparison of profitability, revenue trends, and cash flows as opposed to only quarterly or annual numbers. It is also particularly useful to make informed investment decisions and understand how a company is doing in general. For further information about financial metrics, such as TTM, search for expert guides and resources in various subjects in investing and business finance at Financial Desks.