The Last Twelve Months (LTM) Financial Metrics: Calculations, Confusions, and Calendarization

Last Twelve Months Definition: To calculate the “Last Twelve Months” (LMT) version of a financial metric, such as Revenue, take the figure from the company’s 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.

For example, Western Midstream Partners announced its Q1 2025 results on May 7, 2025.

We’re now in June 2025, so the full Q1 results are available.

Therefore, to calculate the Last Twelve Months Revenue as of today, we can make the following calculations based on the numbers in its 10-K and 10-Q:

LTM Revenue = 2024 Revenue + Q1 2025 Revenue – Q1 2024 Revenue = $3.6 billion

You can calculate the LTM version of virtually any metric based on the Income Statement or Cash Flow Statement, including EBITDA, Net Income, and Free Cash Flow.

You cannot calculate LTM metrics for Balance Sheet numbers because they represent snapshots in time rather than changes over time.

For example, there is no “LTM Accounts Receivable” or “LTM Cash”; only the most recent quarterly or annual figures are relevant.

LTM figures are widely used to describe the valuation multiples in M&A and LBO deals, and many sources quote deal prices based on LTM Enterprise Value / EBITDA.

LTM metrics are also used in comparable company analysis and precedent transactions to describe companies’ historical performances and quote their “trailing” multiples:

You might wonder why we don’t just go back to the most recent Fiscal Year (“FY”) and stop there.

For example, with Western Midstream Partners, why not just calculate the historical EBITDA multiple based on today’s stock price and the financials in the FY 24 annual report?

We could do that, but the LTM metrics capture recent trends and performance as of today’s date or the valuation date, which can matter in certain industries and macro environments.

In this case, Midstream firms are “boring” utility-like companies that do not change much over time, so LTM vs. FY makes a small difference early in the year.

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.

In quarterly models, LTM figures are also important because you will forecast many Balance Sheet and Cash Flow Statement items based on the LTM figures.

For example, Accounts Receivable (AR) itself does not have an LTM version, but you will often forecast AR in a quarterly model based on the company’s LTM Revenue each quarter.

Files & Resources:

• LTM Metrics – Slides (PDF)
• LTM Metrics – Excel Demonstration (XL)
• Western Midstream Partners – Highlighted 10-K (PDF)
• Western Midstream Partners – Highlighted 10-Q (PDF)

Video Table of Contents:

• 0:00: Introduction
• 6:04: Part 1: LTM Metrics in Quarterly Models
• 8:17: Part 2: LTM Multiples in Comparable Companies/Deals
• 9:44: Part 3: LTM vs. NTM (“Next Twelve Months”)
• 12:03: Part 4: Misaligned Fiscal Years
• 14:09: Recap and Summary

LTM Metrics in Quarterly Models

In our Advanced M&A course, one case study uses a deal between Builders FirstSource and BMC Stock Holdings.

To create a quarterly merger model, we forecast each company’s 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.

We make many of the quarterly Working Capital items percentages of the Last Twelve Months’ Revenue, COGS, or SG&A:

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.

For example, if a seasonal business has a “busy season” coming up, and it takes 3 – 6 months to stock up on enough Inventory, it will not wait until the last minute to spike its Inventory balance.

Instead, it will account for that and maintain a higher Inventory balance throughout much of the year, even though it might seem “too high” for the sales activity in a single quarter.

Creating a forecast based on LTM metrics accounts for these types of issues.

Last Twelve Months Metrics in Public Comps and Precedent Transactions

We have tutorials on comparable company analysis (“public comps”) and precedent transactions that reference LTM metrics for Revenue and EBITDA and demonstrate the calculation methods, so you can refer to those for more examples.

If you have Capital IQ, you should be able to pull in all the LTM figures for public companies automatically.

Be careful with their Enterprise Value and EBITDA numbers because Capital IQ does not correctly factor in lease accounting – for U.S. companies, you’ll need to adjust their Enterprise Value numbers by removing the Operating Lease Liability.

If you don’t have Capital IQ, you can use sites like FinViz.com or BeyondSPX.com to search for companies and retrieve financial information.

Data for Precedent Transactions is much harder to find, but you might be able to use a Fairness Opinion or a bank’s industry report to find recent deal multiples.

With both Precedent Transactions and Public Comps, the rationale for using LTM metrics is not only to capture recent business performance but also to make metrics comparable.

Deals get announced in different months in different years, and public companies have fiscal years ending on different dates.

So, if you went by each company’s fiscal year-end date, many financial metrics would be “misaligned” (e.g., one company’s FY ends on June 30^th, but another’s ends on December 31^st).

By using the LTM metrics, you ensure that you are always looking at the same period: The 12 months before the deal announcement date or the current/valuation date.

Last Twelve Months (LTM) vs. Next Twelve Months (NTM)

Related to the “Last Twelve Months” metrics is the concept of a “Next Twelve Months” (NTM) metric.

For example, with Western Midstream Partners above, the NTM Revenue would be calculated as follows:

NTM Revenue = Q2 2025 Revenue + Q3 2025 Revenue + Q4 2025 Revenue + Q1 2026 Revenue

There is no way to “retrieve” the NTM figures from a company’s financials because they’re projected metrics.

So, you normally search for equity research reports and find quarterly forecasts that let you calculate these NTM numbers.

But you could also use fractions and do something like this:

NTM Revenue = (3 / 4) * FY 2025 Revenue + (1 / 4) * FY 2026 Revenue

This approach is OK for moderate growth, non-seasonal companies, but it does not work in other contexts because you can’t always assume that Revenue is evenly distributed over the entire year.

NTM metrics are not common in Public Comps because it’s better to use figures based on the next calendar year or the subject company’s fiscal year; they are more common in Precedent Transactions because deals are announced on varied dates, and so there’s still a need to standardize the period.

NTM metrics and multiples are most useful in:

1. “Yield-based industries” such as REITs and Midstream Oil & Gas, where investors buy stocks based on the dividends they’ll receive over the next year;
2. High-growth industries where companies’ growth and margin profiles change significantly from year to year.

Almost all analyses use LTM metrics, but NTM metrics are in the “maybe sometimes” category.

Like all projected metrics, NTM numbers ignore non-recurring charges and distortions from acquisitions or divestitures in the historical period.

But if that’s your main motivation for using them, you could simply retrieve the full fiscal year projected numbers from the consensus forecasts on Capital IQ or Yahoo Finance.

There’s nothing special about the advantages of projected numbers regarding NTM vs. “Next Fiscal Year” or “Next Calendar Year.”

Misaligned Fiscal Years and Last Twelve Months (LTM) vs. Calendarization

Calendarization is a related concept that comes up when companies have “misaligned” fiscal years.

For example, in a set of Public Comps, Company A has a fiscal year ending on December 31^st, but Company B has a fiscal year that ends on June 30^th.

This issue doesn’t matter for calculating the LTM metrics because it’s 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.

In this context, calendarization matters mostly in the forecasts.

In this example, we need to adjust Company B’s projected numbers so that they end on December 31^st instead of June 30^th.

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.

It would look like this: