Jan 19, 2022 | Knowledge Net profit (TTM) simply explained

Table of contents

1. What is the net profit (TTM)?
2. Finding out net profit (TTM)?
3. How is net profit (TTM) calculated?
4. What does net profit mean?
5. Top 10 stocks with high net profit worldwide

What is the net profit (TTM)?

Net profit (TTM) represents the profit (or loss) of a company after deducting all costs and taxes over the last 12 months. TTM is the abbreviation for “Trailing Twelve Months”. By taking the last 12 months into account, the most recent figures from the last 4 quarterly reports are always taken into account.

Ingeneral, the higher the net profit or net profit margin, the more profitable the company is. The net profit margin is particularly meaningful when comparing several companies from the same sector.

Find out the net profit (TTM)?

In StocksGuide you can determine the net profit of a company quickly and easily in 3 different ways:

1. Profit and loss account

You can find the net profit at a glance in the income statement in the SAP financial data:

2. Cash flow

You can find the net profit at a glance in SAP's cash flow financial data:

3. Fundamental charts

To view the historical development of the net profit, you can select the corresponding key figure in the Charts tab or click on the charts icon next to the net profit:

How is net profit (TTM) calculated?

The net profit (TTM) is calculated by deducting all costs from the sales of the last 12 months.

Calculate net profit (TTM):

To illustrate, the calculation of the net profit of the Alphabet share as of September 13, 2024 is shown in simplified form:

Revenue $ 327,961 million
- Direct costs $ 8139,696 million
= Gross profit $ 188,265 million
- Operating expenses $ 74,949 million
= EBITDA $ 113,316 million
- Depreciation and amortization $ 14,237 million
= EBIT $ 99,079 million
- Financial expenses & taxes $ 11,422 million
= Net profit (earnings after taxes) $ 87,657 million

What does net profit mean?

Net profit indicates how much the company has left after deducting all costs and taxes.

But be careful: a high net profit does not necessarily indicate a good investment! It is therefore important to look at net profit in the overall context and not in isolation. Above all, the net profit margin and earnings per share should be analyzed. As the number of outstanding shares increases, the absolute net profit figure becomes less important.

As net profit can be manipulated by management, this key figure is only suitable for evaluating companies to a limited extent. Free cash flow can hardly be manipulated by management, especially in comparison to profit or EBIT. This is due to the fact that it is almost independent of other key financial figures.

Top 10 stocks with high net profit worldwide

The following table shows 10 stocks with the highest net profit in the world.