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.
Time Warner's Sloan Ratio for the quarter that ended in Mar. 2018 was 2.62%.
As of Mar. 2018, Time Warner has a Sloan Ratio of 2.62%, indicating the company is in the safe zone and there is no funny business with accruals.
Time Warner Sloan Ratio % Historical Data
The historical data trend for Time Warner'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 Time Warner's Sloan Ratio %
For the Broadcasting subindustry, Time Warner'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.
Time Warner's Sloan Ratio % Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Time Warner's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Time Warner's Sloan Ratio % falls into.
Time Warner 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.
Time Warner's Sloan Ratio for the fiscal year that ended in Dec. 2017 is calculated as
Time Warner's Net Income for the trailing twelve months (TTM) ended in Mar. 2018 was 1062 (Jun. 2017 ) + 1372 (Sep. 2017 ) + 1389 (Dec. 2017 ) + 1643 (Mar. 2018 ) = $5,466 Mil.
Time Warner's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2018 was 992 (Jun. 2017 ) + 1494 (Sep. 2017 ) + 1132 (Dec. 2017 ) + 1316 (Mar. 2018 ) = $4,934 Mil.
Time Warner's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2018 was -200 (Jun. 2017 ) + -306 (Sep. 2017 ) + -464 (Dec. 2017 ) + -308 (Mar. 2018 ) = $-1,278 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.
Time Warner (NYSE:TWX) 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 Mar. 2018, Time Warner has a Sloan Ratio of 2.62%, indicating the company is in the safe zone and there is no funny business with accruals.
Time Warner Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Time Warner's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Time Warner is a pure-play entertainment company that owns several television networks, including HBO, CNN, TNT, and the CW. The filmed entertainment segment creates and distributes movies and television programming for internal and external distribution outlets. Warner Bros. and New Line Cinema combine to form the largest filmmaker in the world. The company owns a deep and valuable content library that includes popular movie franchises such as DC Comics and Harry Potter and television programs such as Friends and The Big Bang Theory.
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