What it is: LTM, also called trailing twelve months (TTM), is a period of the most recent twelve consecutive months used for financial analysis and valuation. LTM data, such as revenue or EBITDA, provides a backward-looking view of a company's performance.
Why it is essential: LTM allows startups to analyze financial performance over a specific period and assess trends, growth rates, and financial stability. It provides a comprehensive view of the company's recent performance, which is useful for investors, lenders, and internal decision-making.
Formulas: There are no specific formulas associated with LTM, as it refers to a period of time rather than a calculated metric.
How to use it in the context of startups: Startups can use LTM data to evaluate their financial performance, identify growth patterns, and benchmark against industry standards. It helps in financial planning, forecasting, and assessing the company's financial trajectory. LTM data can be used in investor presentations, financial reporting, and valuation analysis.
