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Why are LTM (last twelve months) figures often used in multiples?

  1. A They give the most recent full-year picture without seasonal distortion
  2. B They are easier to obtain
  3. C They exclude one-off items automatically
  4. D They match the fiscal year
Answer

They give the most recent full-year picture without seasonal distortion

Forward multiples based on projected earnings are also common, and are generally preferred where reliable estimates exist.

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