TTM Revenue / LTM Revenues | Uses | Calculation (with Examples) - YouTube

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clicking the bell icon. Friends today we are giving to learn a topic that has TTM revenue to

LTM revenue. So at the very first end what we can see over here is a

screenshot of LTM of the last year of the last 12 years and so on and so forth.

The most recent period the period prior 1, I mean period ending one year prior

to the most recent 1. So let's understand what this thing is all about

see what is TTM Revenue and LTM Revenue.At the end of the day LTM

revenue is basically interesting concept and every investor should look at

how exactly it works? See LTM over here it stands for

it means the last 12 months, So this last 12 months revenue the last 12 months

revenue is known as is called as your TTM revenue which is also known as your

trailing 12-month or 12 months revenue right TTM .So you must have got

LTM means the last 12 months revenue and TTM means the trailing 12 months revenue.

Now when an investor wants to understand how a firm is doing financially he or

she uses the LTM ratio or the LTM revenue as a measurement and in most

cases firms prepare their financial report for past 12 months which is

usually 12 months we can say that and the LTM revenue or the TTM

revenue helps us to look at the profit for the whole year instead of just

having a brief glance on the quarterly profit. Now what is good is it the LTM

revenue or the quarterly revenue? LTM or quarterly revenue what is good

now my one single question now which is a better for financial analysis. Let's

understand this by taking an example. Let's say the company

called Prince Toys limited and it has some following information as TTM

revenue standing at let's say $400,000 , they have some quarterly revenue

let's say standing at $92,000 say if an investor we

just look at the last quarter for the two quarters we would get a recent

figure but the point is by looking at the recent figure, you are skipping the

important consideration so by looking at the quarterly revenue you are not able

to judge I mean whether the company has earned that revenue to do the seasonal

reasons so it may so happen that you do the festive seasons the firm must I mean

firm has sold more toys than the rest of the year so on the other hand it may say

sell fewer toys due to the labor problem, strikes etc. So as an investor to

understand the company's financial health you need to look at holistically

and you cannot look at partially, so that's why understanding the TTM revenue

is more important than the quarterly revenue. I hope I thought I I hope I have

made you understand the importance now let's calculate the TTM revenue if you

are a finance junkie it would be quite easy for you for investor who have

just started out the method would be useful to you on two bases, first you

would be able to calculate the LTM revenue of any year of any firm,

Second you will be able to compare the LTM, the LTM revenue of the same or the

difference firm whenever you get the figure. Let's look at the

method of calculating the of basically calculation of LTM. Now let's say

there's an ice cream company which has some following details of 2016 and 2017

let's say from July to September it has some following details like $50,000 from

October to December this is basically the revenue details

$62,000 and from January to March

considering as the calendar year of 54,000 and April to June let's say

49,000 and July to September as 57,000. I'll quickly write Jan to March, April to

June and July to September right so this are the details that we have okay we

have to join too much. So find out the LTM revenue for 2016 and 2017 for June

sorry for June 2016 and for September 2016 now all we need to do is

to add up the quarterly revenue so we will first calculate the TTM revenue for

2016 for calculating the TTM revenue for 2016 we need to add the July to

September and October to December so we'll add a 50 I mean no we need to add

up the July to September, October to December January to March and and

April to June. Here's the calculation 50,000 plus 62,000 plus 54 plus 49 so

that's 215,000 now we will calculate the TTM revenue for September

2016, that was for June 2016. Now we are going to calculate

for September 2016, Now this is TTM for calculating the TTM for September

2016 we need to add from October to December this value will just start

adding up October to December 62,000 plus 54 plus 49 plus 57,000 which comes

to $22,000. So calculating the last 12 months revenue from June 2016

and September 2016 have served a purpose as an investor you can now look at the

quarterly revenues holistically and not periodically. Now since the LTM revenue

is averaged out the seasonal changes if any firm the quarterly revenue as a

result of LTM and TTM revenue provides more clarity to the investor before they

get ever get interested to invest in the company so even the balance sheet

does not get affected by the last 12 months revenue so the balance sheet

is prepared at a single point of time of time no matter what happens throughout the year. Now we'll understand the use of this

particular formula what exactly is the use which is really more important now

why investors and financial analysts use LTM Revenue? Here’s a small list -

The last 12 months revenue is considered more recent than the annual reports okay.

Now if the investor looks at the annual report in the mid of the next your

he or she would only understand what happened what happens that during the

year last year as a result the first 6 months of the year will be skipped but

if he or she calculates LTM revenue they would get the most recent figure of

the company. Second, the short-term measurement don't serve investor and

financial analyst revenue for the immediate year and may not be a big

chunk of time, but it serves a purpose. third the financial analyst prefers the

TTM revenue because while acquisition TTM revenue provides the most accurate

evaluation of the business. Fourth the 12 months revenue allows the investor to

basically compare the relative

performance the relative performance similar of the similar companies under

the same industry so that's it for this particular topic if you have learned and

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