I would like to ask you why many companies show them Revenue TTM as an indicator of performance during the year rather than to see the YTD or Quarter to Quarter comparison?

What information can give me TTM?

I mean, if I am calculating TTM now Q2 2022, in the calculation I am still including Q3 and Q4 2021, and especially now after COVID, many companies had significant Revenue in 2021 compared to 2019. So doing TTM I am using as indicator Q3|Q4 that maybe it is over-performed respect the reality, so giving me distorted information at the moment. So why do companies show TTM?


1 Answer 1


Many businesses are cyclical, meaning that they have one (or two) quarters that comprise more than their fair share of activity. For example, Discretionary Consumer Retailers (like electronics) tend to have their highest sales periods in the 4th calendar quarter due to Christmas and holiday shopping activity. Using Trailing Twelve Months (TTM) ensures that one of those periods is always included in the totals, where YTD and Period over Period would not.

However, it is true that extraordinary non-cyclical events like COVID can make these totals difficult to compare, especially when using them to predict future performance, which is why no measure should be look at in a vacuum. But it's also not always correct just to ignore them outright.

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