How to calculate last twelve months (LTM) financials?

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And as you can see here there’s also a tricky part we have a very strange structure here this is the final year 2013 this is the first half 2013 this is the second half first half 2014 so the deal is almost happened in this after the second half of 2014 and we want to get the last 12 months figures closest to the announcement of the deal so that we would really

Get it get a more accurate guide to contact our study now i will go to powerpoint and before we start adjusting our income statement i want to explain you what ltm financials are and how come they’re structured so i’m going to go to my powerpoint file as you can see here guys now i’m going to explain the logic behind lpl financials in forgettings acquisition of

Importance the field as you can see here is announced on 26th of august in 2014 which is so right at the close to the end of third quarter so to last quarter results 5 to the year the closest is the end of 2nd quarter 2014 which is 2014 first half these two quarters so in this report released here i have these figures alright what i’m interested is this the ltm

Financials from this last announcement close to the deal the last announcement close the deal 12 months before so that the year prior to the announcement the lt and financials so how can i get that first i need of course the full year 2013 the previous year here as you can see the four quarters of 2013 and i have the first half of 2013 q1 and q2 figures which

Are released in q2 10-q reports here at the end of 2nd quarter so i simply subtract this 2013 first health figure from the full-year figures here so i get rid of deaths and i remain with these two quarters and then i add the first two quarters of 2014 into this which means i get the last twelve months figures the closest to the announcement of the deal so this is

How it works all right and now we know how to adjust the income state let’s get to the ltl figures what we put is simple it is what we explained here we subtracted this point from full-year previous year so we were left with the site and we edit this part at the top of it sold have the last two up month ages as we did in here we subtracted from the full previous

Year subtracted the first house and we added this first off of the second year so we would have this i think that’s clear and i did this for each line item and i made the calculation step to check them and this is how we get the ltm figures and this is where we get adjusted ltl figures which we use in our transaction multiple calculations as you can see here and

Now i’m going to calculate the stretch multiples and therefore this straight forward because we have all the data we need so with simply evr sales we simply divide the implied enterprise value found by the the traveling item we don’t make any adjustments in this line so it’s simply getting from the reporting income statements by the last twelve month revenues

Which you look at for multiple and multiple of 4 and then we do the same thing for a beta we divided the implied enterprise value by the it just lasted off monkey bits our number which is as you can see um much higher than actually 2014 number the adjusted number is 31 million dollars higher when you go for a lot of more figures which gave us a multiple of sixteen point four

Transcribed from video
How to calculate last twelve months (LTM) financials? By M\u0026A Analyst