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Learn/DCF Valuation/Module 4
4.4·5 min read

Reading History: LTM Mechanics

Last-twelve-months figures let you measure a company's most recent year even mid-fiscal-year. The formula is a simple stitch.

By the end you can
  • ✓Define LTM and why it's used
  • ✓Compute an LTM figure from filings
LTM (Last Twelve Months)

A rolling measure of performance over the most recent 12 months - not necessarily a fiscal year. It lets you value a company on current results even when you're partway through its fiscal year.

LTM=Most recent full year+recent YTD−prior-year YTD\text{LTM} = \text{Most recent full year} + \text{recent YTD} - \text{prior-year YTD}
Add the latest stub period; subtract the matching stub from a year earlier to avoid double-counting.
Worked example · LTM revenue mid-year
Given
  • •It's July 1, 2019.
  • •Full-year 2018 revenue: $15mm
  • •First-half 2019 revenue: $10mm
  • •First-half 2018 revenue: $7mm
Solution
  1. 1.Stitch the periods
    15+10−7=1815 + 10 - 7 = 18
Answer

revenue (through 6/30/2019) = $18mm. You took the full prior year, added the new half, and removed the old half so nothing is counted twice.

Check yourself

FY2020 EBITDA was $40mm. 9-month YTD 2021 EBITDA is $36mm; 9-month YTD 2020 was $30mm. What is LTM EBITDA?

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Projecting Revenue, Margins & Drivers
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Unlevered vs. Levered Free Cash Flow