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.
Meta Platforms's Sloan Ratio for the quarter that ended in Sep. 2024 was 1.77%.
As of Sep. 2024, Meta Platforms has a Sloan Ratio of 1.77%, indicating the company is in the safe zone and there is no funny business with accruals.
Meta Platforms Sloan Ratio % Historical Data
The historical data trend for Meta Platforms'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 Meta Platforms's Sloan Ratio %
For the Internet Content & Information subindustry, Meta Platforms'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.
Meta Platforms's Sloan Ratio % Distribution in the Interactive Media Industry
For the Interactive Media industry and Communication Services sector, Meta Platforms's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Meta Platforms's Sloan Ratio % falls into.
Meta Platforms 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.
Meta Platforms's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Meta Platforms's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was 68680.497 (Dec. 2023 ) + 61595.146 (Mar. 2024 ) + 72523.837 (Jun. 2024 ) + 86877.006 (Sep. 2024 ) = R$289,676 Mil.
Meta Platforms's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 95075.719 (Dec. 2023 ) + 95841.231 (Mar. 2024 ) + 104328.757 (Jun. 2024 ) + 136916.567 (Sep. 2024 ) = R$432,162 Mil.
Meta Platforms's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -31711.506 (Dec. 2023 ) + -43493.573 (Mar. 2024 ) + -44693.858 (Jun. 2024 ) + -47735.836 (Sep. 2024 ) = R$-167,635 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.
Meta Platforms (BSP:M1TA34) 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. 2024, Meta Platforms has a Sloan Ratio of 1.77%, indicating the company is in the safe zone and there is no funny business with accruals.
Meta Platforms Sloan Ratio % Related Terms
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Meta is the largest social media company in the world, boasting close to 4 billion monthly active users worldwide. The firm's "Family of Apps," its core business, consists of Facebook, Instagram, Messenger, and WhatsApp. End users can leverage these applications for a variety of different purposes, from keeping in touch with friends to following celebrities and running digital businesses for free. Meta packages customer data, gleaned from its application ecosystem and sells ads to digital advertisers. While the firm has been investing heavily in its Reality Labs business, it remains a very small part of Meta's overall sales.
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