Earnings per share (EPS) is one way to measure the profit a company brings in per each outstanding share of stock. This calculation is valuable when used as a comparison between companies or when looking at the EPS growth rate, which marks the changes in EPS over a period of time. It's also used in the calculation of other important financial factors, like the price-to-earnings ratio (P/E), which compares the price of a stock on the market to the amount of revenue allocated to each share; it's a good measure of stock value. Calculation of earnings per share is a straightforward formula, but there are a few different conceptual ways to calculate an EPS, and each of them means something slightly different.

## What Is TTM?

TTM stands for trailing 12 months. This phrase is used to represent the previous 12 months of a company's finances, up to the date at which the value was calculated. TTM is used because a company's main financial statements are published once per year, whenever their fiscal year ends.

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While the previous fiscal year is used for accounting purposes, the preceding 12 months (TTC) is used to track the rolling performance of a metric over time. It can give a more realistic view of the company's past performance, especially outside of the month when a budget year ends.

## How to Calculate EPS (TTM)

You can calculate basic EPS with the company's net profit, minus preferred dividend payouts, divided by the number of outstanding shares of its stock. Because EPS is flexible, some of these factors can mean different things.

For example, the number of outstanding shares can be taken as the quantity of shares at the end of the period in question. It can also mean a weighted average of the number of shares over the period, since share numbers can fluctuate over time. Other kinds of EPS can be calculated based on the inclusion or exclusion of factors like stock options, non-core profits and losses or capital efficiency.

## EPS (TTM) Formula and Example

The team at Forbes explains that TTM EPS looks at the immediately previous 12 consecutive months for its information. The most common way to calculate the trailing 12 month EPS is by looking at the four most recent quarters of operation and combining them. For example: Earnings per share = [ (Net profit) - (Dividends paid) ] / (Outstanding shares of stock).

In this example, one can consider previous quarters as such: **3Q 2021 EPS = $0.97, 2Q 2021 EPS = $0.85, 1Q 2021 EPS = $0.81 and 4Q 2020 EPS = $0.77.**

This represents the last **12 months** of data for an EPS to be calculated during the **4th quarter of 2021**. In this case, since EPS has already been calculated quarterly, the trailing 12 month earnings per share for this company is the sum of each of these: **$3.40.**

## Additional Examples of EPS (TTM)

To move one quarter into the future with the TTM formula, you would go to **1Q 2022**, where the EPS for **4Q 2021 came back at 0.87**. Since this is a rolling calculation, you would drop the value from **4Q 2020**, and include the value for **4Q 2021**, so that the sum still captures the previous 12 consecutive months. The new EPS (TTM) is **$3.50.**

Note that the new EPS (TTM) is higher than the previous; overall, the company's EPS is growing. However, if you look at the values, there are four quarters of constant growth, with the most recent quarter representing a decrease in EPS. This tells a different story to potential investors.

**Consider also:** How to Calculate Diluted EPS