What Does TTM Mean in Business and Finance?

In the business and finance worlds, TTM stands for “trailing twelve months” and is a key indicator used to gauge the performance of various investments over time. TTM measures the total earnings or net income over the most recent 12-month period. TTM is especially useful for assessing the profitability of a company when comparing different periods, such as a quarterly basis.

For example, let’s assume we wanted to measure the profitability of Company X between July 2022 and June 2023. To do this, we would calculate the net income (or loss) for the past four quarters, i.e. Q2 2022, Q3 2022, Q4 2022, and Q1 2023. This would give us a base measure of Company X’s performance over a 12-month period, or the TTM.

In the financial world, TTM is often used as a metric to compare the current performance of different stocks and investments side-by-side. For example, if you want to compare the profitability of two companies in the same industry, you could take the TTM of each of them and compare how much they have made over the past 12 months. This would provide a realistic representation of each company’s financial performance over time, as well as a good indication of which company is doing better than the other.

In addition to comparing the performance of different investments, TTM is also used by companies to check their own quarterly performance and track changes in trends over time. This allows them to identify opportunities for growth or areas for improvement.

Overall, TTM is a key metric in financial analysis and can be used for both investors and business owners to help assess the performance of different investments and companies over the last year.