{"id":31458,"date":"2025-06-04T11:27:19","date_gmt":"2025-06-04T16:27:19","guid":{"rendered":"https:\/\/breakingintowallstreet.com\/?post_type=biws_kb&#038;p=31458"},"modified":"2025-12-17T00:18:09","modified_gmt":"2025-12-17T05:18:09","slug":"last-twelve-months-ltm","status":"publish","type":"biws_kb","link":"https:\/\/breakingintowallstreet.com\/kb\/finance\/last-twelve-months-ltm\/","title":{"rendered":"The Last Twelve Months (LTM) Financial Metrics: Calculations, Confusions, and Calendarization"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-flat ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">The Last Twelve Months (LTM) Financial Metrics: Calculations, Confusions, and Calendarization<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/breakingintowallstreet.com\/kb\/finance\/last-twelve-months-ltm\/#LTM_Metrics_in_Quarterly_Models\">LTM Metrics in Quarterly Models<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/breakingintowallstreet.com\/kb\/finance\/last-twelve-months-ltm\/#Last_Twelve_Months_Metrics_in_Public_Comps_and_Precedent_Transactions\">Last Twelve Months Metrics in Public Comps and Precedent Transactions<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/breakingintowallstreet.com\/kb\/finance\/last-twelve-months-ltm\/#Last_Twelve_Months_LTM_vs_Next_Twelve_Months_NTM\">Last Twelve Months (LTM) vs. Next Twelve Months (NTM)<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/breakingintowallstreet.com\/kb\/finance\/last-twelve-months-ltm\/#Misaligned_Fiscal_Years_and_Last_Twelve_Months_LTM_vs_Calendarization\">Misaligned Fiscal Years and Last Twelve Months (LTM) vs. Calendarization<\/a><\/li><\/ul><\/nav><\/div>\n\n<blockquote><p><strong>Last Twelve Months Definition:<\/strong> To calculate the \u201cLast Twelve Months\u201d (LMT) version of a financial metric, such as Revenue, take the figure from the company\u2019s last fiscal year, add the number from its most recent interim period (3 months, 6 months, etc.), and subtract the figure from that same interim period in the <em>previous<\/em> fiscal year.<\/p><\/blockquote>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-31459 size-full\" title=\"Last Twelve Months Example\" src=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112219\/01-Last-Twelve-Months-Example.jpg\" alt=\"Last Twelve Months Example\" width=\"1448\" height=\"586\" srcset=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112219\/01-Last-Twelve-Months-Example.jpg 1448w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112219\/01-Last-Twelve-Months-Example-300x121.jpg 300w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112219\/01-Last-Twelve-Months-Example-1024x414.jpg 1024w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112219\/01-Last-Twelve-Months-Example-768x311.jpg 768w\" sizes=\"(max-width: 1448px) 100vw, 1448px\" \/><\/p>\n<p>For example, Western Midstream Partners announced its Q1 2025 results on May 7, 2025.<\/p>\n<p>We\u2019re now in June 2025, so the full Q1 results are available.<\/p>\n<p>Therefore, to calculate the Last Twelve Months Revenue as of today, we can make the following calculations based on the numbers in its <a href=\"https:\/\/youtube-breakingintowallstreet-com.s3.us-east-1.amazonaws.com\/Finance\/LTM\/101-10-WES-10-K.pdf\" target=\"_blank\" rel=\"noopener\">10-K<\/a> and <a href=\"https:\/\/youtube-breakingintowallstreet-com.s3.us-east-1.amazonaws.com\/Finance\/LTM\/101-10-WES-10-Q.pdf\" target=\"_blank\" rel=\"noopener\">10-Q<\/a>:<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-31460 size-full\" title=\"LTM Excel Calculation\" src=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112253\/02-LTM-Excel.jpg\" alt=\"LTM Excel Calculation\" width=\"1578\" height=\"716\" srcset=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112253\/02-LTM-Excel.jpg 1578w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112253\/02-LTM-Excel-300x136.jpg 300w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112253\/02-LTM-Excel-1024x465.jpg 1024w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112253\/02-LTM-Excel-768x348.jpg 768w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112253\/02-LTM-Excel-1536x697.jpg 1536w\" sizes=\"(max-width: 1578px) 100vw, 1578px\" \/><\/p>\n<p><strong>LTM Revenue<\/strong> = 2024 Revenue + Q1 2025 Revenue \u2013 Q1 2024 Revenue = $3.6 billion<\/p>\n<p>You can calculate the LTM version of virtually any metric based on the <a href=\"https:\/\/breakingintowallstreet.com\/kb\/accounting\/income-statement\/\" target=\"_blank\" rel=\"noopener\">Income Statement<\/a> or <a href=\"https:\/\/breakingintowallstreet.com\/kb\/accounting\/cash-flow-statement\/\" target=\"_blank\" rel=\"noopener\">Cash Flow Statement<\/a>, including <a href=\"https:\/\/breakingintowallstreet.com\/kb\/accounting\/ebitda\/\" target=\"_blank\" rel=\"noopener\">EBITDA<\/a>, <a href=\"https:\/\/breakingintowallstreet.com\/kb\/accounting\/net-income\/\" target=\"_blank\" rel=\"noopener\">Net Income<\/a>, and <a href=\"https:\/\/breakingintowallstreet.com\/kb\/financial-statement-analysis\/how-to-calculate-free-cash-flow\/\" target=\"_blank\" rel=\"noopener\">Free Cash Flow<\/a>.<\/p>\n<p>You <strong>cannot<\/strong> calculate LTM metrics for <a href=\"https:\/\/breakingintowallstreet.com\/kb\/accounting\/balance-sheet\/\" target=\"_blank\" rel=\"noopener\">Balance Sheet<\/a> numbers because they represent <em>snapshots in time<\/em> rather than changes over time.<\/p>\n<p>For example, there is no \u201cLTM Accounts Receivable\u201d or \u201cLTM Cash\u201d; only the most recent quarterly or annual figures are relevant.<\/p>\n<p>LTM figures are widely used to describe the <a href=\"https:\/\/breakingintowallstreet.com\/kb\/valuation\/valuation-multiples\/\" target=\"_blank\" rel=\"noopener\">valuation multiples<\/a> in M&amp;A and LBO deals, and many sources quote deal prices based on LTM Enterprise Value \/ EBITDA.<\/p>\n<p>LTM metrics are also used in <a href=\"https:\/\/breakingintowallstreet.com\/kb\/valuation\/comparable-company-analysis-cca\/\" target=\"_blank\" rel=\"noopener\">comparable company analysis<\/a> and <a href=\"https:\/\/breakingintowallstreet.com\/kb\/valuation\/precedent-transaction-analysis\/\" target=\"_blank\" rel=\"noopener\">precedent transactions<\/a> to describe companies\u2019 historical performances and quote their \u201ctrailing\u201d multiples:<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-31461 size-full\" title=\"LTM Figures in Public Comps\" src=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112325\/03-Public-Comps-LTM.jpg\" alt=\"LTM Figures in Public Comps\" width=\"1670\" height=\"1424\" srcset=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112325\/03-Public-Comps-LTM.jpg 1670w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112325\/03-Public-Comps-LTM-300x256.jpg 300w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112325\/03-Public-Comps-LTM-1024x873.jpg 1024w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112325\/03-Public-Comps-LTM-768x655.jpg 768w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112325\/03-Public-Comps-LTM-1536x1310.jpg 1536w\" sizes=\"(max-width: 1670px) 100vw, 1670px\" \/><\/p>\n<p>You might wonder why we don\u2019t just go back to the most recent Fiscal Year (\u201cFY\u201d) and stop there.<\/p>\n<p>For example, with Western Midstream Partners, why not just calculate the historical EBITDA multiple based on today\u2019s stock price and the financials in the FY 24 annual report?<\/p>\n<p><strong>We could do that, but the LTM metrics capture <em>recent<\/em> trends and performance as of today\u2019s date or the valuation date, which can matter in certain industries and macro environments.<\/strong><\/p>\n<p>In this case, Midstream firms are \u201cboring\u201d utility-like companies that do not change much over time, so LTM vs. FY makes a small difference early in the year.<\/p>\n<p>However, if we were in a crisis year, such as 2008 or 2020, and we were analyzing a company at risk from the financial crisis or COVID lockdowns, LTM figures would be very important.<\/p>\n<p>In <strong>quarterly models<\/strong>, LTM figures are also important because you will forecast many Balance Sheet and Cash Flow Statement items based on the LTM figures.<\/p>\n<p>For example, Accounts Receivable (AR) <em>itself<\/em> does not have an LTM version, but you will often forecast AR in a quarterly model based on the company\u2019s LTM Revenue each quarter.<\/p>\n<div class='code-block code-block-2' style='margin: 8px 0; clear: both;'>\n<div class=\"kb-adinsert-modal\">\n    <div class=\"kb-adinsert-top\">\n      <div class=\"media\">\n          <img decoding=\"async\" class=\"alignnone size-full wp-image-28448\" src=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2024\/04\/24164120\/adv-fm-tile.png\" alt=\"PowerPoint Pro\" width=\"128\" height=\"128\" \/>\n      <\/div>\n      <div class=\"content\">\n          <h3>Master Financial Modeling for Investment Banking With <strong>BIWS Core Financial Modeling<\/strong><\/h3>\n      <\/div>\n    <\/div>\n    \n    <div class=\"full_text\">\n    \t<ul>\n        \t<li>\n            \t<h4>Become a financial modeling pro<\/h4>\n              <p>158 videos, detailed written guides, Excel files, quizzes, and more<\/p>\n\t\t\t    <\/li>\n          <li>\n          \t<h4>Complete 10+ detailed global case studies<\/h4>\n            <p>These include both the theory and the practical applications<\/p>\n\t\t\t    <\/li>\n          <li>\n          \t<h4>Prepare for your internship or full-time job<\/h4>\n            <p>Gain the skills you need to \u201chit the ground running\u201d on Day 1\n\n<\/p>\n\t\t\t  <\/li>\n      <\/ul>\n        \n      <a class=\"cta-link orange-button-medium\" href=\"https:\/\/breakingintowallstreet.com\/core-financial-modeling\/\" target=\"_blank\">Full Details<\/a>\n      \n      <a class=\"cta-link orange-button-medium bg-blue\" href=\"https:\/\/biws-support.s3.us-east-1.amazonaws.com\/Course-Outlines\/Core-Financial-Modeling-Course-Outline.pdf\" target=\"_blank\" rel=\"noopener\">Short Outline<\/a>\n    <\/div>\n<\/div><\/div>\n\n<h3><strong>Files &amp; Resources:<\/strong><\/h3>\n<ul>\n<li><a href=\"https:\/\/youtube-breakingintowallstreet-com.s3.us-east-1.amazonaws.com\/Finance\/LTM\/101-10-LTM-Last-Twelve-Months-Slides.pdf\" target=\"_blank\" rel=\"noopener\">LTM Metrics \u2013 Slides (PDF)<\/a><\/li>\n<li><a href=\"https:\/\/youtube-breakingintowallstreet-com.s3.us-east-1.amazonaws.com\/Finance\/LTM\/101-10-WES-LTM-Examples.xlsx\" target=\"_blank\" rel=\"noopener\">LTM Metrics \u2013 Excel Demonstration (XL)<\/a><\/li>\n<li><a href=\"https:\/\/youtube-breakingintowallstreet-com.s3.us-east-1.amazonaws.com\/Finance\/LTM\/101-10-WES-10-K.pdf\" target=\"_blank\" rel=\"noopener\">Western Midstream Partners \u2013 Highlighted 10-K (PDF)<\/a><\/li>\n<li><a href=\"https:\/\/youtube-breakingintowallstreet-com.s3.us-east-1.amazonaws.com\/Finance\/LTM\/101-10-WES-10-Q.pdf\" target=\"_blank\" rel=\"noopener\">Western Midstream Partners \u2013 Highlighted 10-Q (PDF)<\/a><\/li>\n<\/ul>\n<h3><strong>Video Table of Contents:<\/strong><\/h3>\n<ul>\n<li><strong>0:00:<\/strong> Introduction<\/li>\n<li><strong>6:04:<\/strong> Part 1: LTM Metrics in Quarterly Models<\/li>\n<li><strong>8:17:<\/strong> Part 2: LTM Multiples in Comparable Companies\/Deals<\/li>\n<li><strong>9:44:<\/strong> Part 3: LTM vs. NTM (&#8220;Next Twelve Months&#8221;)<\/li>\n<li><strong>12:03:<\/strong> Part 4: Misaligned Fiscal Years<\/li>\n<li><strong>14:09:<\/strong> Recap and Summary<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"LTM_Metrics_in_Quarterly_Models\"><\/span><strong>LTM Metrics in Quarterly Models<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In our <a href=\"https:\/\/breakingintowallstreet.com\/advanced-ma-modeling\/\" target=\"_blank\" rel=\"noopener\">Advanced M&amp;A course<\/a>, one case study uses a deal between Builders FirstSource and BMC Stock Holdings.<\/p>\n<p>To create a quarterly merger model, we forecast each company\u2019s financial statements separately on a quarterly basis, and then we combine the statements by using INDEX\/MATCH or XLOOKUP to account for variable close dates.<\/p>\n<p>We make many of the quarterly Working Capital items percentages of the <em>Last Twelve Months\u2019<\/em> Revenue, COGS, or SG&amp;A:<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-31462 size-full\" title=\"LTM Metrics in Quarterly Forecasts\" src=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112344\/04-LTM-Metrics-Quarterly-Forecasts.jpg\" alt=\"LTM Metrics in Quarterly Forecasts\" width=\"1958\" height=\"338\" srcset=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112344\/04-LTM-Metrics-Quarterly-Forecasts.jpg 1958w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112344\/04-LTM-Metrics-Quarterly-Forecasts-300x52.jpg 300w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112344\/04-LTM-Metrics-Quarterly-Forecasts-1024x177.jpg 1024w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112344\/04-LTM-Metrics-Quarterly-Forecasts-768x133.jpg 768w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112344\/04-LTM-Metrics-Quarterly-Forecasts-1536x265.jpg 1536w\" sizes=\"(max-width: 1958px) 100vw, 1958px\" \/><\/p>\n<p>We do that because the Balance Sheet line items represent the cumulative changes and developments in a business over time, and companies normally plan based on patterns over the entire year.<\/p>\n<p>For example, if a seasonal business has a \u201cbusy season\u201d coming up, and it takes 3 \u2013 6 months to stock up on enough Inventory, it will not wait until the last minute to spike its Inventory balance.<\/p>\n<p>Instead, it will account for that and maintain a higher Inventory balance throughout much of the year, even though it might seem \u201ctoo high\u201d for the sales activity in a single quarter.<\/p>\n<p>Creating a forecast based on LTM metrics accounts for these types of issues.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Last_Twelve_Months_Metrics_in_Public_Comps_and_Precedent_Transactions\"><\/span><strong>Last Twelve Months Metrics in Public Comps and Precedent Transactions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>We have tutorials on <a href=\"https:\/\/breakingintowallstreet.com\/kb\/valuation\/comparable-company-analysis-cca\/\" target=\"_blank\" rel=\"noopener\">comparable company analysis<\/a> (\u201cpublic comps\u201d) and <a href=\"https:\/\/breakingintowallstreet.com\/kb\/valuation\/precedent-transaction-analysis\/\" target=\"_blank\" rel=\"noopener\">precedent transactions<\/a> that reference LTM metrics for Revenue and EBITDA and demonstrate the calculation methods, so you can refer to those for more examples.<\/p>\n<p>If you have Capital IQ, you should be able to pull in all the LTM figures for public companies automatically.<\/p>\n<p><strong>Be careful with their Enterprise Value and EBITDA numbers because Capital IQ does not correctly factor in lease accounting \u2013 for U.S. companies, you\u2019ll need to adjust their Enterprise Value numbers by <em>removing<\/em> the Operating Lease Liability.<\/strong><\/p>\n<p>If you don\u2019t have Capital IQ, you can use sites like <a href=\"https:\/\/finviz.com\/\" target=\"_blank\" rel=\"noopener\">FinViz.com<\/a> or <a href=\"https:\/\/beyondspx.com\/\" target=\"_blank\" rel=\"noopener\">BeyondSPX.com<\/a> to search for companies and retrieve financial information.<\/p>\n<p>Data for Precedent Transactions is much harder to find, but you might be able to use a <a href=\"https:\/\/mergersandinquisitions.com\/investment-banking-fairness-opinions\/\" target=\"_blank\" rel=\"noopener\">Fairness Opinion<\/a> or a bank\u2019s industry report to find recent deal multiples.<\/p>\n<p>With both Precedent Transactions and Public Comps, the rationale for using LTM metrics is not only to capture recent business performance but also to <strong>make metrics comparable.<\/strong><\/p>\n<p>Deals get announced in different months in different years, and public companies have fiscal years ending on different dates.<\/p>\n<p>So, if you went by each company\u2019s fiscal year-end date, many financial metrics would be \u201cmisaligned\u201d (e.g., one company\u2019s FY ends on June 30<sup>th<\/sup>, but another\u2019s ends on December 31<sup>st<\/sup>).<\/p>\n<p>By using the LTM metrics, you ensure that you are <em>always<\/em> looking at the same period: The 12 months before the deal announcement date or the current\/valuation date.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Last_Twelve_Months_LTM_vs_Next_Twelve_Months_NTM\"><\/span><strong>Last Twelve Months (LTM) vs. Next Twelve Months (NTM)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Related to the \u201cLast Twelve Months\u201d metrics is the concept of a \u201cNext Twelve Months\u201d (NTM) metric.<\/p>\n<p>For example, with Western Midstream Partners above, the NTM Revenue would be calculated as follows:<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-31463 size-full\" title=\"Next Twelve Months (NTM) Metrics\" src=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112427\/05-Next-Twelve-Months.jpg\" alt=\"Next Twelve Months (NTM) Metrics\" width=\"1890\" height=\"428\" srcset=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112427\/05-Next-Twelve-Months.jpg 1890w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112427\/05-Next-Twelve-Months-300x68.jpg 300w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112427\/05-Next-Twelve-Months-1024x232.jpg 1024w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112427\/05-Next-Twelve-Months-768x174.jpg 768w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112427\/05-Next-Twelve-Months-1536x348.jpg 1536w\" sizes=\"(max-width: 1890px) 100vw, 1890px\" \/><\/p>\n<p><strong>NTM Revenue<\/strong> = Q2 2025 Revenue + Q3 2025 Revenue + Q4 2025 Revenue + Q1 2026 Revenue<\/p>\n<p>There is no way to \u201cretrieve\u201d the NTM figures from a company\u2019s financials because they\u2019re <strong>projected metrics<\/strong>.<\/p>\n<p>So, you normally search for <a href=\"https:\/\/mergersandinquisitions.com\/equity-research-report\/\" target=\"_blank\" rel=\"noopener\">equity research reports<\/a> and find quarterly forecasts that let you calculate these NTM numbers.<\/p>\n<p>But you could also use fractions and do something like this:<\/p>\n<p><strong>NTM Revenue<\/strong> = (3 \/ 4) * FY 2025 Revenue + (1 \/ 4) * FY 2026 Revenue<\/p>\n<p>This approach is OK for moderate growth, non-seasonal companies, but it does not work in other contexts because you can\u2019t always assume that Revenue is evenly distributed over the entire year.<\/p>\n<p><strong>NTM metrics are not common in Public Comps because it\u2019s better to use figures based on the next calendar year or the subject company\u2019s fiscal year; they are more common in Precedent Transactions because deals are announced on varied dates, and so there\u2019s still a need to standardize the period.<\/strong><\/p>\n<p>NTM metrics and multiples are <em>most<\/em> useful in:<\/p>\n<ol>\n<li>\u201cYield-based industries\u201d such as REITs and Midstream Oil &amp; Gas, where investors buy stocks based on the dividends they\u2019ll receive over the next year;<\/li>\n<li>High-growth industries where companies\u2019 growth and margin profiles change significantly from year to year.<\/li>\n<\/ol>\n<p>Almost all analyses use LTM metrics, but NTM metrics are in the \u201cmaybe sometimes\u201d category.<\/p>\n<p>Like all projected metrics, NTM numbers ignore non-recurring charges and distortions from acquisitions or divestitures in the historical period.<\/p>\n<p>But if that\u2019s your main motivation for using them, you could simply retrieve the <strong>full fiscal year projected numbers<\/strong> from the consensus forecasts on Capital IQ or Yahoo Finance.<\/p>\n<p>There\u2019s nothing special about the advantages of projected numbers regarding NTM vs. \u201cNext Fiscal Year\u201d or \u201cNext Calendar Year.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Misaligned_Fiscal_Years_and_Last_Twelve_Months_LTM_vs_Calendarization\"><\/span><strong>Misaligned Fiscal Years and Last Twelve Months (LTM) vs. Calendarization<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>Calendarization<\/strong> is a related concept that comes up when companies have \u201cmisaligned\u201d fiscal years.<\/p>\n<p>For example, in a set of Public Comps, Company A has a fiscal year ending on December 31<sup>st<\/sup>, but Company B has a fiscal year that ends on June 30<sup>th<\/sup>.<\/p>\n<p>This issue doesn\u2019t matter for calculating the LTM metrics because it\u2019s the same process for all the companies: Take the last FY numbers, add the most recent interim period numbers, and subtract them from the same interim period in the previous FY.<\/p>\n<p><strong>In this context, calendarization matters mostly in the forecasts.<\/strong><\/p>\n<p>In this example, we need to adjust Company B\u2019s projected numbers so that they end on December 31<sup>st<\/sup> instead of June 30<sup>th<\/sup>.<\/p>\n<p>To do that, we could find forecasts for the 4 individual quarters in that calendar year or take 50% of its Fiscal Year 1 projections and add 50% of its Fiscal Year 2 projections.<\/p>\n<p>It would look like this:<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-31464 size-full\" title=\"Calendarization Example\" src=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112458\/06-Calendarization.jpg\" alt=\"Calendarization Example\" width=\"1468\" height=\"1245\" srcset=\"https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112458\/06-Calendarization.jpg 1468w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112458\/06-Calendarization-300x254.jpg 300w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112458\/06-Calendarization-1024x868.jpg 1024w, https:\/\/biwsuploads-assest.s3.amazonaws.com\/biws\/wp-content\/uploads\/2025\/06\/04112458\/06-Calendarization-768x651.jpg 768w\" sizes=\"(max-width: 1468px) 100vw, 1468px\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>To calculate the \u201cLast Twelve Months\u201d (LMT) version of a financial metric, such as Revenue, take the figure from the company\u2019s last fiscal year, add the number from its most recent interim period (3 months, 6 months, etc.), and subtract the figure from that same interim period in the previous fiscal year.<\/p>\n","protected":false},"featured_media":0,"template":"","class_list":["post-31458","biws_kb","type-biws_kb","status-publish","hentry","kb_category-finance"],"acf":[],"_links":{"self":[{"href":"https:\/\/breakingintowallstreet.com\/wp-json\/wp\/v2\/biws_kb\/31458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/breakingintowallstreet.com\/wp-json\/wp\/v2\/biws_kb"}],"about":[{"href":"https:\/\/breakingintowallstreet.com\/wp-json\/wp\/v2\/types\/biws_kb"}],"wp:attachment":[{"href":"https:\/\/breakingintowallstreet.com\/wp-json\/wp\/v2\/media?parent=31458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}