How do you calculate your TTM Revenue
Why is TTM Revenue important to early stage investors
If you’re a startup founder, you’ve likely heard of Trailing Twelve Months (TTM) revenue. But what exactly is it, and why is it so important to early stage investors? In this post, we’ll break down the concept of TTM revenue and explain how to calculate it, as well as examine why it matters in the world of early stage investing. Let’s dive in!
Trailing Twelve Months (TTM) revenue is a financial metric used to measure the total amount of money your company has earned over the last twelve months. This number can give potential investors an idea of your company’s growth trajectory and performance over time. It can also be used by existing shareholders to evaluate their investments.
Calculating your TTM revenue is relatively simple. First, add up all your revenue for each month going back 12 months from the present day. Once you have that number, divide it by 12 to get your average monthly revenue for the last year. That number will give you a good estimate of your TTM revenue figure.
For early-stage investors, TTM revenue provides valuable insight into a company before making an investment decision. This metric gives investors an idea of how much money they can expect to make on their investment over the course of its lifetime. By looking at past performance and calculating future projections based on that data, investors can make more informed decisions about where to put their funds moving forward.
All in all, understanding Trailing Twelve Months (TTM) revenue is essential for startup founders who are looking for early stage investments or existing shareholders trying to assess their investments over time. Calculating this metric involves adding up all your company's revenues from the last twelve months and dividing that number by 12 for an average monthly figure that tells us about past performance and future projections alike. With this information in hand, investors can make more informed decisions about where they want to put their money in order to get the best return on investment possible. So if you're looking to raise capital or evaluate existing investments, start with analyzing your company's trailing twelve months revenues—it just may be worth its weight in gold!
