TTM EBITDA

Category

Ratios

Units

Currency

Formula

TTM EBITDA = TTM EBIT + TTM Depreciation & Amortization

Reference

Non-GAAP measure: Regulation G and Regulation S-K Item 10(e)

Source

Calculated by GeminIQ from figures reported in SEC filings

TTM EBITDA is a company's earnings before interest, taxes, depreciation, and amortization over the trailing twelve months, the four most recent fiscal quarters. It approximates the operating profit the business generated over the latest full year before financing costs, taxes, and the noncash charges that spread the cost of long-lived assets over time.

EBITDA is not a US GAAP measure. It is calculated from figures reported in SEC filings, and companies that present it must follow SEC non-GAAP rules.

GeminIQ takes EBITDA from the filing when it is reported and otherwise calculates it as EBIT plus depreciation and amortization, where EBIT is net income plus income tax plus interest expense. Depreciation and amortization usually comes from the cash flow statement, where it is often tagged DepreciationDepletionAndAmortization in XBRL, because many companies do not show it as a separate income-statement line. Regulation G and Regulation S-K Item 10(e) require any company presenting EBITDA to reconcile it to a GAAP figure, usually net income, and in SEC filings Item 10(e) also bars giving it more prominence than that GAAP figure.

The trailing figure adds up four quarters. Income-statement items come straight from each 10-Q, but depreciation is often taken from the cash flow statement, which a 10-Q reports only year to date, so quarterly amounts are found by differencing. In both cases the fourth quarter is the 10-K annual amount minus the nine-month year-to-date amount. Companies also publish "adjusted EBITDA" that removes items such as stock-based compensation or restructuring charges; that is a company-specific measure and will not match a figure calculated from GAAP inputs.

TTM EBITDA is the standard denominator for EV/EBITDA and for leverage ratios such as debt to EBITDA, which lenders often write into loan covenants. It is widely used because it compares companies with different depreciation policies, tax positions, and capital structures. The trade-off is that it ignores the cash a company must spend to replace worn-out assets, so analysts often check it against capital expenditures.