THE PLAYGROUND

Make the periods comparable

Annual figures and year-to-date figures are not interchangeable.

LIVE EXPERIMENT

Make the periods comparable

Last twelve months550

Prior full-year revenue$500

1001000

Prior-year first six months$220

0500

Current-year first six months$270

0600

Before you move a sliderHow do you construct LTM revenue without double-counting the latest six months?

LTM = 500 − 220 + 270 = 550

Prior full year500

Remove prior comparable six months-220

Add current six months270

Last twelve months550

READ THE MECHANISM

This replaces an old six-month window with the new one. Simply adding current YTD to the full year would include eighteen months. Doubling YTD assumes no seasonality and is a different estimate.

Model assumptions & units

Same entity, currency, accounting basis and units. LTM = prior full year − prior comparable YTD + current YTD. This model does not adjust acquisitions, FX, restatements or seasonality.

Make the periods comparable

Make the periods comparable

Learn the thinking behind it