LTM EBITDA (last twelve months)

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-06

// THE SHORT ANSWER

LTM EBITDA is earnings before interest, tax, depreciation and amortisation for the twelve months to a test date, also called trailing twelve months (TTM). It is built from the last full year plus the year to date, less the same months of the year before: a business with EBITDA of US$12m last year, and US$7m in the six months to date against US$5m a year earlier, has LTM EBITDA of US$14m. Covenants tested quarterly use it so that each test reads a full year of trading. It usually comes from management accounts, so a lender reconciles it to the audited figures when they arrive.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.