A calculation that analyzes data trends over a rolling 12-month period. This metric is computed by summing data points for the preceding year and updating the sum each month. For instance, monthly sales figures are added together for the last twelve months, and the total is recalculated every month as new data becomes available. This technique effectively smooths out short-term fluctuations, revealing longer-term patterns.
The importance of this method lies in its ability to provide a stable view of performance, minimizing the impact of seasonality or unusual monthly events. By observing trends in the rolling annual sum, stakeholders can discern underlying growth or decline that might be obscured by short-term volatility. Historically, this has been used across diverse sectors, from sales and finance to manufacturing and production planning, enabling informed decision-making and strategic adjustments.