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.
As of Jul. 2016, Piedmont Natural Gas Co has a Sloan Ratio of 6.84%, indicating the company is in the safe zone and there is no funny business with accruals.
Piedmont Natural Gas Co Sloan Ratio % Historical Data
* 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 Piedmont Natural Gas Co's Sloan Ratio %
For the Utilities - Regulated Gas subindustry, Piedmont Natural Gas Co'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.
Piedmont Natural Gas Co's Sloan Ratio % Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Piedmont Natural Gas Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Piedmont Natural Gas Co's Sloan Ratio % falls into.
Piedmont Natural Gas Co 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.
Piedmont Natural Gas Co's Sloan Ratio for the fiscal year that ended in Oct. 2015 is calculated as
Piedmont Natural Gas Co's Net Income for the trailing twelve months (TTM) ended in Jul. 2016 was -14.109 (Oct. 2015 ) + 97.79 (Jan. 2016 ) + 63.432 (Apr. 2016 ) + -6.73 (Jul. 2016 ) = $140 Mil.
Piedmont Natural Gas Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jul. 2016 was -1.548 (Oct. 2015 ) + -4.103 (Jan. 2016 ) + 259.852 (Apr. 2016 ) + 56.363 (Jul. 2016 ) = $311 Mil.
Piedmont Natural Gas Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jul. 2016 was -148.509 (Oct. 2015 ) + -120.905 (Jan. 2016 ) + -142.552 (Apr. 2016 ) + -139.381 (Jul. 2016 ) = $-551 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.
Piedmont Natural Gas Co (NYSE:PNY) 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 Jul. 2016, Piedmont Natural Gas Co has a Sloan Ratio of 6.84%, indicating the company is in the safe zone and there is no funny business with accruals.
Piedmont Natural Gas Co Sloan Ratio % Related Terms
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Piedmont Natural Gas Co (Piedmont Natural Gas Co) Business Description
Piedmont Natural Gas Co Inc was incorporated in New York in 1950 and began operations in 1951. In 1994, it merged into a newly formed North Carolina corporation with the same name for the purpose of changing its state of incorporation to North Carolina. The Company is an energy services company whose business is distribution of natural gas to residential, commercial, industrial and power generation clients in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities who are its wholesale customers. The Company is invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, regulated interstate natural gas transportation and storage and regulated intrastate natural gas transportation. It provides service from resource centers in Anderson, Greenville and Spartanburg in South Carolina and Charlotte, Salisbury, Greensboro, Winston-Salem, High Point, Burlington, Hickory, Indian Trail, Spruce Pine, Reidsville, Fayetteville, New Bern, Wilmington, Tarboro, Elizabeth City, Rockingham and Goldsboro in North Carolina. In North Carolina, it also provides natural gas service to Greenville, Rocky Mount and Wilson. In Tennessee, its service area is the metropolitan area of Nashville, including wholesale natural gas service to Gallatin and Smyrna. The Company has three reportable business segments, regulated utility, regulated non-utility activities and unregulated non-utility activities. The regulated utility segment includes operating a safe and reliable natural gas distribution system and the ability to recover the costs and expenses of the business in the rates charged to customers. The regulated non-utility activities segment consists of equity method investments in regulated energy-related joint ventures that are held by the Company's wholly-owned subsidiaries. The unregulated non-utility activities segment consists of its equity method investment in an unregulated energy-related joint venture that is held by a wholly-owned subsidiary. The regulated utility competes with other energy products, such as electricity and propane, in the residential and commercial customer markets. Natural gas for power generation competes with other fuel sources for the generation of electricity, including coal, nuclear and renewable resources. Additionally, as with industrial customers, the Company competes with other pipeline providers to serve the power generation plants.
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