Last Twelve Months (LTM)

Last twelve months, or LTM, refers to financial figures for the trailing twelve months regardless of the financial year. It is calculated as the last full financial year plus the current year to date minus the same period in the prior year, which removes seasonality and allows a rolling comparison. In M&A, LTM EBITDA is the standard reference for purchase price multiples, because it is more current than the last annual result and, unlike the forecast, has actually been achieved.

In practice the figure used is an adjusted LTM EBITDA drawn from financial due diligence and corrected for one-off effects. A reliable calculation requires functioning monthly or quarterly reporting with consistent cut-off, since otherwise year-end adjustments, inventory measurement or provisions distort the rolling figure. In the mid-market this is a frequent diligence finding. It should also be noted that a rolling period carries a one-off effect until it drops out of the window, which can change the figure considerably depending on the reference date. LTM is distinct from NTM, the next twelve months, which rests on forecasts and is therefore far more contested in negotiations.

In growing companies the next twelve months systematically exceed the last, so the choice of reference materially shifts the price. It is advisable to present the rolling series across several reference dates, because only the trend shows whether a development is stable or whether a single strong month shapes the picture. A single figure without a trend is unconvincing in negotiation. Comparability of the periods included should also be checked, since changes in the consolidation scope, acquisitions or discontinued operations break the series and require adjustment.