Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Meredith's Sloan Ratio for the quarter that ended in Sep. 2021 was -2.06%.
As of Sep. 2021, Meredith has a Sloan Ratio of -2.06%, indicating the company is in the safe zone and there is no funny business with accruals.
Meredith Sloan Ratio % Historical Data
The historical data trend for Meredith's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Meredith's Sloan Ratio %
For the Publishing subindustry, Meredith's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Meredith's Sloan Ratio % Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Meredith's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Meredith's Sloan Ratio % falls into.
Meredith Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Meredith's Sloan Ratio for the fiscal year that ended in Jun. 2021 is calculated as
Meredith's Net Income for the trailing twelve months (TTM) ended in Sep. 2021 was 148.5 (Dec. 2020 ) + 79.1 (Mar. 2021 ) + 36.7 (Jun. 2021 ) + 24.8 (Sep. 2021 ) = $289 Mil.
Meredith's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2021 was 182.9 (Dec. 2020 ) + 76 (Mar. 2021 ) + 60.8 (Jun. 2021 ) + 42.3 (Sep. 2021 ) = $362 Mil.
Meredith's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2021 was -3 (Dec. 2020 ) + 35.1 (Mar. 2021 ) + 16.4 (Jun. 2021 ) + -7.8 (Sep. 2021 ) = $41 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Meredith (NYSE:MDP) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Sep. 2021, Meredith has a Sloan Ratio of -2.06%, indicating the company is in the safe zone and there is no funny business with accruals.
Meredith Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Meredith's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Meredith Corp is an American media company that focuses on publications and marketing services around the home, family, food, and lifestyle markets. The company operates two divisions: national media and local media. The national media segment publishes magazines such as Every Day with Rachael Ray, Better Homes and Gardens, Family Fun, and Parents; this segment is the source of the majority of Meredith's revenue. The local media segment owns over 15 television stations around the United States. In 2014, the company announced a 10-year licensing agreement with Martha Stewart Omnimedia to acquire the rights to Martha Stewart Living, Martha Stewart Weddings, and marthastewart.com.
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