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.
Verizon Communications's Sloan Ratio for the quarter that ended in Mar. 2024 was -0.63%.
As of Mar. 2024, Verizon Communications has a Sloan Ratio of -0.63%, indicating the company is in the safe zone and there is no funny business with accruals.
Verizon Communications 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 Verizon Communications's Sloan Ratio %
For the Telecom Services subindustry, Verizon Communications'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.
Verizon Communications's Sloan Ratio % Distribution in the Telecommunication Services Industry
For the Telecommunication Services industry and Communication Services sector, Verizon Communications's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Verizon Communications's Sloan Ratio % falls into.
Verizon Communications 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.
Verizon Communications's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Verizon Communications's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 4648 (Jun. 2023 ) + 4762 (Sep. 2023 ) + -2705 (Dec. 2023 ) + 4602 (Mar. 2024 ) = $11,307 Mil.
Verizon Communications's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 9731 (Jun. 2023 ) + 10778 (Sep. 2023 ) + 8677 (Dec. 2023 ) + 7084 (Mar. 2024 ) = $36,270 Mil.
Verizon Communications's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -4090 (Jun. 2023 ) + -5408 (Sep. 2023 ) + -7824 (Dec. 2023 ) + -5245 (Mar. 2024 ) = $-22,567 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.
Verizon Communications (NYSE:VZ) 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. 2024, Verizon Communications has a Sloan Ratio of -0.63%, indicating the company is in the safe zone and there is no funny business with accruals.
Verizon Communications Sloan Ratio % Related Terms
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Verizon Communications (Verizon Communications) Business Description
Verizon Communications is primarily a wireless business (it provides about 70% of service revenue and nearly all operating income). It serves about 92 million postpaid and 22 million prepaid phone customers (following the acquisition of Tracfone) via its nationwide network, making it the largest U.S. wireless carrier. Fixed-line telecom operations include local networks in the Northeast, which reach about 25 million homes and businesses and serve about 8 million broadband customers. Verizon also provides telecom services nationwide to enterprise customers, often using a mixture of its own and other carriers' networks.
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