Calculating trailing-12 month values, also known as TTM, can be a powerful way to analyze financial or business data over the most recent year. This method focuses on the latest 12-month period, providing a rolling snapshot of performance or trends. Unlike calendar-based analysis, which adheres strictly to yearly or quarterly periods, TTM values are dynamic and update with each new data point. This makes them ideal for ongoing monitoring, where understanding recent trends is more relevant than sticking to predefined reporting periods.
The concept of a TTM value is straightforward: it involves summing, averaging, or otherwise aggregating data from the most recent 12 months. For instance, if you’re tracking monthly revenue, a TTM sum would include the total revenue for the latest 12 months, updating automatically as new months’ data becomes available. This ensures that you’re always working with the most current information, offering a more flexible and actionable view of performance.
Why Are 12-Month Trailing Values Useful?
Calculating TTM values is valuable in contexts where trends or seasonality play a significant role. For example, retail businesses may experience seasonal spikes during the holiday season, while other industries might have cyclical patterns tied to the economy. A TTM analysis smooths out these seasonal fluctuations, offering a clearer picture of overall performance without being skewed by short-term anomalies.
For investors, financial analysts, and business owners, this calculation can be a crucial metric. It helps in understanding key financial ratios (including price-to-earnings ratios), by providing a consistent timeframe for comparison. It also allows for benchmarking against competitors or industry averages, as trailing metrics are widely used in reporting and valuation. Moreover, it can aid in spotting trends early, such as declining sales or increasing costs, enabling proactive decision-making.
Calculating TTM Values in Excel
In the following example, I have sales data by quarter. Since they are quarters, I only need to pull the last four values to get the last 12 months worth of values.
In the simplest approach, you can just use the SUM function and grab the last four values from the top:
By not freezing any cells and copying the formula down, it will automatically adjust so that it’s always getting the most recent four values.
You can make the formula more dynamic by using the OFFSET function. You can change the number of values you want to add up. And it can be useful if your data is at the bottom, and you want to start from the last value you input. Here’s how you can use a variable to determine how many trailing values you want to calculate.
Using the OFFSET function, you can specify the height and width of the range. In the above example, I’m using cell F1 to specify the number of periods I want to sum up.
If your most recent values are at the bottom of your range, the OFFSET function can help you with this as well. Here’s how the formula would look like:
=SUM(OFFSET(B2,COUNTA(B:B)-2,0,-4,1))
B2 is the starting reference point.
The COUNTA function counts the number of nonblank cells in column B. It is reduced by 2 since the reference point, B2, is in row 2. It needs to be reduced by 2 to get back to 0.
There are 0 columns to offset, hence the next argument is 0.
The -4 tells the formula that you want to go back 4 rows.
The 1 at the end tells the formula that it is just 1 column wide.
This produces an array, which is then summed up through the SUM function.
If you like this post on How to Calculate Trailing 12 Month (TTM) Values in Excel, please give this site a like on Facebook and also be sure to check out some of the many templates that we have available for download. You can also follow me on Twitter and YouTube. Also, please consider buying me a coffee if you find my website helpful and would like to support it.