Last Twelve Months (‘LTM’) Analysis

When comparing financial results for financial years, the last twelve months (‘LTM’) performance is commonly also shown as a reference point. This is because looking at the last twelve months results can be a good measure of current business performance, taking into account the impact of any inherent seasonality.  The benefit of looking at the LTM vs. looking at annualised year-to-date (‘YTD’) results is that the latter is clearly not actual performance and may also be influenced by seasonal factors.  Where the business has experienced significant growth in the latter few months of the LTM period, run-rate analysis may be utilised to evidence/illustrate this.

The analysis attached presents revenue on a rolling LTM basis. This is a useful way of illustrating how the business has grown over a period of time.

Taking this chart as an example, the line at September-18 would show the twelve months revenue to September-18 (i.e. October-17 to September-18), whilst the line at December-18 would show twelve months revenue to December-18 (i.e. January-18 to December-18).

Download Excel File

 Example of LTM analysis

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