Trailing 12 Months

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Definition of 'Trailing 12 Months'

The trailing 12 months (TTM) is a financial term that refers to the most recent 12 months of data. This is often used to compare companies' financial performance over time, or to compare a company's performance to its industry peers.

The TTM can be used to calculate a variety of financial metrics, such as revenue, earnings, and cash flow. It can also be used to calculate ratios, such as the price-to-earnings ratio (P/E) and the debt-to-equity ratio.

The TTM is a useful tool for investors because it provides a more up-to-date picture of a company's financial health than other time periods, such as the fiscal year or the calendar year. However, it is important to note that the TTM can be affected by seasonality, which means that a company's performance in the TTM may not be representative of its performance over the long term.

Here are some examples of how the TTM can be used:

* A company's TTM revenue can be compared to its TTM earnings to calculate its profit margin.
* A company's TTM earnings can be compared to its TTM share price to calculate its P/E ratio.
* A company's TTM cash flow can be compared to its TTM debt to calculate its debt-to-equity ratio.

The TTM is a versatile tool that can be used to analyze a company's financial health in a variety of ways. However, it is important to understand the limitations of the TTM before using it to make investment decisions.

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