What does the term 'trailing twelve months' (TTM) refer to?

The term 'trailing twelve months' (TTM) refers specifically to a financial metric that calculates the performance of a company over the most recent 12-month period. This measurement takes into account data from the past year and is frequently used to assess a company's financial health, performance trends, and profitability. It provides a dynamic view of a company’s performance, as it continuously updates with the latest financial results and offers a clear picture of recent operational success.

TTM is particularly useful because it smooths out seasonal fluctuations and allows investors and analysts to view a company’s performance over a consistent timeframe. This makes it more reliable than static annual results, which can be influenced by atypical events or seasonal variances.

In contrast, other options refer to different concepts: forecasting relates to predicting future performance, average monthly earnings represent a different aspect of financial analysis, and measuring annual trends without seasonal impact lacks the immediacy that TTM provides, focusing instead on a broader analysis. Hence, the definition of TTM directly aligns with its function of evaluating the most recent year's performance, making it the accurate choice.