LTM, explained simply
If the fiscal year ended in December and the transaction is under way in October, the annual figures are already ten months old. LTM rolls the measurement period forward so that the buyer sees the latest full year of performance.
LTM is typically calculated as the last full fiscal year plus the current year to date, less the same months of the prior year.
The twelve-month window rolls forward
IllustrativeAlder Creek monthly adjusted EBITDA, $ millions
Calculation
FormulaLTM = last full fiscal year + current year to date − prior year to date for the same months
Worked example
| Alder Creek adjusted EBITDA | $ millions |
|---|---|
| Fiscal year 2025 (January to December) | 4.5 |
| Add: January to September 2026 | 3.6 |
| Less: January to September 2025 | (3.4) |
| LTM to September 2026 | 4.7 |
Alder Creek Manufacturing, Inc. is a fictional company. All figures are illustrative.
The business has improved since the 2025 year end, and LTM captures that improvement.
Why it matters in a deal
Prices, loan sizes and covenants are usually set on LTM figures. The period moves forward as the transaction progresses, so diligence often updates it before closing.
Red flags
- Unusually strong recent months just before the sale
- An LTM period chosen to exclude a weak month
- LTM built from unreviewed management accounts that do not agree to the year-end statements
Frequently asked questions
What does LTM (last twelve months) mean in M&A?
LTM means the most recent twelve months of results, ending on the latest month available. It shows the current scale of a business, not results for a fiscal year that may have ended many months earlier.
What is the difference between LTM and NTM?
LTM looks back over the past twelve months. NTM (next twelve months) is a forecast.
Is LTM the same as TTM?
Yes. The terms are interchangeable.