TTM

Buyers and investors rarely price a company on its most recent calendar or fiscal year, because
that year may have ended months before the deal is discussed. Trailing twelve months solves that by
always looking at the most recent complete year of actual results, whatever today happens to be —
it is the freshest full year of evidence available, and it moves forward every month rather than
resetting once a year.

For a founder, this matters because your own internal reporting may be built around a fiscal year
that does not match what a buyer wants to see. Being able to produce a clean TTM figure on request —
not just an annual report from months ago — is table stakes for a serious conversation about price.

A TTM figure is calculated by taking the twelve calendar months immediately preceding today,
regardless of where that falls relative to your fiscal year. In practice this usually means adding
the current partial fiscal year to date and then adding the remaining months from the prior full
fiscal year, so the twelve months are continuous and current.

TTM is prized specifically because it is built entirely from results that already happened — no
projection, no assumption about what the rest of the year will do. That is also its limit: it says
nothing about what happens next, which is why a fast-growing company's TTM figure can understate
where the business actually is today, and why buyers will look at TTM alongside a run rate
rather than choosing one over the other.

Keeping a TTM figure ready at all times, rather than reconstructing it under pressure once a buyer
asks, is a small piece of preparation that pays off disproportionately. It signals that your
reporting is current and trustworthy, and it removes a step where a rushed calculation could
introduce an error that a buyer's advisors then have to query, costing time and a little credibility
at exactly the wrong moment in a negotiation.