How do you calculate LTM?

Take the latest full fiscal year, add the year-to-date figure for the current year, and subtract the same year-to-date period from the prior year. If the last annual report shows $1,000 of revenue, the first half of this year is $560 and the first half of last year was $500, LTM revenue is $1,000 + $560 - $500 = $1,060.

What does calendarization mean?

Calendarization restates a company's results onto the calendar year, January to December, so it can sit next to peers whose fiscal years end in December. For a company whose year ends in June, calendar 2026 is the second half of its fiscal 2026 plus the first half of its fiscal 2027.

Should you use forward or trailing multiples?

Use whichever fits the purpose, and never mix them. Trailing multiples use actual reported results, so they are factual but backward looking. Forward multiples use estimates for the next year, which is what investors are actually pricing, so trading comps lean forward. Precedent transactions are usually shown on LTM, because that is what the buyer knew when it signed.

Valuation

LTM, calendarization and forward multiples

By SuperdayReps · Michigan Ross Undergrad | Wharton MBA · ex-Citi | ex-Greenhill · Former Head Mentor at a Leading IB Prep Service

7 min read · updated October 14, 2026

A multiple is only meaningful if every company in the set is measured the same way. Comparing one company's EBITDA for the year ended December with another's for the year ended June is comparing two different years. Comparing a stale annual number with one that includes last quarter is comparing two different businesses.

This lesson is about the plumbing that fixes that: LTM figures, calendarization, and the choice between forward and trailing multiples. None of it is glamorous. All of it decides whether your comps mean anything.

LTM: the most recent twelve months

LTM stands for last twelve months (you will also hear TTM, trailing twelve months). It is the most recent full year of results available, regardless of where the fiscal year ends.

Why not just use the last annual report? Because by October, last December's numbers are ten months old. A lot can happen in ten months. And why not take the last six months and double them? Because most businesses are seasonal. A retailer that earns a third of its profit in the holiday quarter would be badly misstated by annualizing the spring. Twelve consecutive months contain every season exactly once.

You can't usually read LTM off a filing. You build it:

$\text{LTM} = \text{Latest fiscal year} + \text{Current YTD} - \text{Prior-year YTD}$

Say it's August 2026 and a company with a December year end has just reported its second quarter.

Period	Revenue
Fiscal 2025 (Jan to Dec 2025), from the annual report	$1,000
Plus: first half 2026, from the latest quarterly report	+$560
Less: first half 2025, from the same quarterly report	-$500
LTM ending June 30, 2026	$1,060

The logic is just swapping: drop the first half of 2025 from the year, and replace it with the first half of 2026. The result runs July 2025 through June 2026.

Two practical points. First, do the same for EBITDA and net income, and clean the pieces for one-off items consistently. A charge in the current year to date sits inside the LTM window, so add it back. A charge in last year's first half sits in both the annual figure and the half you subtract, so it drops out on its own, as long as you treat both the same way. Second, balance sheet items don't get an LTM. Debt, cash and share counts are a snapshot, so you use the latest balance sheet as it is.

Common mistake

Adding the current YTD and forgetting to subtract the prior-year YTD. That gives you eighteen months of results, not twelve, and a multiple that looks a third cheaper than it really is. Count the months every time: twelve, plus six, minus six.

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Frequently asked

How do you calculate LTM?: Take the latest full fiscal year, add the year-to-date figure for the current year, and subtract the same year-to-date period from the prior year. If the last annual report shows $1,000 of revenue, the first half of this year is $560 and the first half of last year was $500, LTM revenue is $1,000 + $560 - $500 = $1,060.
What does calendarization mean?: Calendarization restates a company's results onto the calendar year, January to December, so it can sit next to peers whose fiscal years end in December. For a company whose year ends in June, calendar 2026 is the second half of its fiscal 2026 plus the first half of its fiscal 2027.
Should you use forward or trailing multiples?: Use whichever fits the purpose, and never mix them. Trailing multiples use actual reported results, so they are factual but backward looking. Forward multiples use estimates for the next year, which is what investors are actually pricing, so trading comps lean forward. Precedent transactions are usually shown on LTM, because that is what the buyer knew when it signed.