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.
Directv's Sloan Ratio for the quarter that ended in Mar. 2015 was -0.54%.
As of Mar. 2015, Directv has a Sloan Ratio of -0.54%, indicating the company is in the safe zone and there is no funny business with accruals.
Directv Sloan Ratio % Historical Data
The historical data trend for Directv'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.
For the Broadcasting subindustry, Directv'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.
Directv's Sloan Ratio % Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Directv's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Directv's Sloan Ratio % falls into.
Directv 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.
Directv's Sloan Ratio for the fiscal year that ended in Dec. 2014 is calculated as
Directv's Net Income for the trailing twelve months (TTM) ended in Mar. 2015 was 593.216 (Jun. 2014 ) + 474.136 (Sep. 2014 ) + 630.958 (Dec. 2014 ) + 674.52 (Mar. 2015 ) = €2,373 Mil.
Directv's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2015 was 1084.864 (Jun. 2014 ) + 1289.712 (Sep. 2014 ) + 1332.473 (Dec. 2014 ) + 1511.664 (Mar. 2015 ) = €5,219 Mil.
Directv's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2015 was -590.272 (Jun. 2014 ) + -679 (Sep. 2014 ) + -793.969 (Dec. 2014 ) + -661.584 (Mar. 2015 ) = €-2,725 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.
Directv (FRA:DIG1) 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. 2015, Directv has a Sloan Ratio of -0.54%, indicating the company is in the safe zone and there is no funny business with accruals.
Directv Sloan Ratio % Related Terms
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Directv was incorporated in Delaware in 2009. The Company is a provider of digital television entertainment in the United States and Latin America. It operates two direct-to-home, or DTH, business units: DIRECTV U.S. and DIRECTV Latin America, which are differentiated by their geographic location and are engaged in acquiring, promoting, selling and distributing digital entertainment programming via satellite to residential and commercial subscribers. In addition, the Company owns and operate two regional sports networks, or RSNs, hold a minority ownership interest in ROOT SPORTS Northwest and own a 42% interest in Game Show Network, LLC, or GSN, a television network dedicated to game-related programming and Internet interactive game playing. The Company face substantial competition in the MVPD industry and from emerging digital media distribution providers. Its competition includes companies that offer video, audio, interactive programming, telephony, data and other entertainment services, such as cable television, other DTH companies, telcos, wireless companies and companies that are developing new technologies, including online video distributors. The Company provides services in PanAmericana and Brazil from leased transponders on two geosynchronous satellites. Sky Mexico provides its services from leased transponders on a separate satellite. In addition, it leases a backup satellite that serves Sky Brasil and Sky Mexico. The Company is subject to government regulation in the United States, by the FCC and by other federal, state and local authorities. The Company is subject to similar regulatory agencies in Latin America. It is also subject to the rules and procedures of the International Telecommunication Union, or ITU, a agency of the United Nations, which coordinates telecommunications networks and services.
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