Move to Twelve Month Trailing (“TTM”) Fundamentals calculation

By Published On: April 22nd, 2020

AfricanFinancials is moving to a Twelve Month Trailing (TTM) basis for the calculation of its core valuation parameters (called Fundamentals) being the

  • P/E ratio
  • EV/EBITDA
  • Price to Book Value ratio
  • Dividend yield
  • ROE

The TTM method annualises the earnings and statement of financial position indicators (the shareholders funds, interest bearing debt and cash position) of the first half year period with the second half earnings of the previous year (the most recent 12 month period) and seeks to provide a truer reflection of the Fundamentals over the course of the year because they’re more current, and they are seasonally adjusted. The 12 months studied do not necessarily coincide with a fiscal-year ending period.

The 12-month measure is typically reported in the investor relations sections of our clients investor relations websites, which will be customarily updated on a half yearly basis. The last 12 consecutive months provides investors with a compromise that is both current and seasonally adjusted.

The move to the TTM basis will be phased in over the following 6 months as our clients’ respective half years come up.

About the Author: Rob Stangroom

Rob Stangroom
My mandate for listed companies in Africa is to commercially leverage direct contacts with retail and professional investors. AfricanFinancials is an initiative for listed companies, by listed companies to implement good communications governance and investor relations practices. Many companies don’t care about retail investors, BUT in the modern day of social and digital media theýre missing out on commercial opportunity: an investor typically is and should be a customer.
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