Definition: Last Twelve Months (LTM) EBITDA is a valuation metric that shows earnings before interest, taxes, depreciation, and amortization adjustments for the past 12-moths period.

What Does LTM EBITDA Mean?

What is the definition of LTM EBITDA? This ratio presents a company’s revenues prior to any interest, tax, depreciation and amortization based on the company’s financial data of 12 months ago. The metric corresponds to a calendar year; hence, if an analyst calculates the LTMEBITDA of a company on April, he will trace the financial data of the company between May of the previous year and April of the current year.

This ratio is useful because it shows what the company has earned before interest and tax payments are covered for, thereby providing an indication of its operational strength and performance, within the past 12 months.

Let’s look at an example.


In its latest 20-F report, Company ABC reported an EBITDA of $5.16 million for the first quarter of 2016. Michael, who works as a financial analyst in a brokerage firm, wants to calculate the LTM EBITDA. Hence, he constructs an Excel spreadsheet as follows:


For the YTD period between Q1 2016 and Q2 2015, LTM net profit is $12.07 million. After adding the income tax provision, the interest expenses, and the depreciation & amortization expenses, Michael finds that the 12-month EBITDA is $20.76 million. Then, he inputs the non-cash charges and the $3.50 million, which represent the settlement with the acquiring company, to find that the adjusted EBITDA, or else the last 12-months EBITDA is $18.14 million.

Summary Definition

Define Last Twelve Months EBITDA: 12-month EBITDA means a company’s earnings without adjusting for interest, taxes, depreciation, and amortization for the trailing 12 calendar months.