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.
Talisman Energy's Sloan Ratio for the quarter that ended in Dec. 2014 was -8.87%.
As of Dec. 2014, Talisman Energy has a Sloan Ratio of -8.87%, indicating the company is in the safe zone and there is no funny business with accruals.
Talisman Energy Sloan Ratio % Historical Data
The historical data trend for Talisman Energy'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 Talisman Energy's Sloan Ratio %
For the Oil & Gas E&P subindustry, Talisman Energy'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.
Talisman Energy's Sloan Ratio % Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Talisman Energy's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Talisman Energy's Sloan Ratio % falls into.
Talisman Energy 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.
Talisman Energy's Sloan Ratio for the fiscal year that ended in Dec. 2014 is calculated as
Talisman Energy's Net Income for the trailing twelve months (TTM) ended in Dec. 2014 was 354.993 (Mar. 2014 ) + -174.432 (Jun. 2014 ) + 329.8 (Sep. 2014 ) + -1289.49 (Dec. 2014 ) = €-779 Mil.
Talisman Energy's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2014 was 340.533 (Mar. 2014 ) + 268.64 (Jun. 2014 ) + 355.408 (Sep. 2014 ) + 490.655 (Dec. 2014 ) = €1,455 Mil.
Talisman Energy's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2014 was 485.133 (Mar. 2014 ) + -506.368 (Jun. 2014 ) + -376.36 (Sep. 2014 ) + -589.597 (Dec. 2014 ) = €-987 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.
Talisman Energy (FRA:TLM) 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 Dec. 2014, Talisman Energy has a Sloan Ratio of -8.87%, indicating the company is in the safe zone and there is no funny business with accruals.
Talisman Energy Sloan Ratio % Related Terms
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Talisman Energy Inc was incorporated under the Canada Business Corporations Act in Canada on December 14, 1982. The Company is a Canadian-based independent oil and gas producers company. Its main business activities are exploration, development, production, transportation and marketing of crude oil, natural gas and natural gas liquids. In 2014, the Company's activities were conducted in four geographic segments: North America, the North Sea, Southeast Asia, and Other. The North America segment includes operations in Canada and the U.S. The North Sea segment includes operations and exploration activities in the UK and Norway. The Southeast Asia segment includes operations and exploration activities in Indonesia, Malaysia, Vietnam and Papua New Guinea and non-operated production in Australia/Timor-Leste. The Company also had non-operated production in Algeria, operations and exploration activities in Colombia and exploration activities in the Kurdistan Region of Iraq. For ease of reference, the activities in Algeria, Colombia and the Kurdistan Region of Iraq, where applicable, are referred to collectively as the other geographic segment or Rest of World, except where otherwise noted. For operational purposes, Talisman has two core operating areas: the Americas and Asia-Pacific. The Company's aggregate production from its consolidated entities and equity investments for the year ended December 31, 2014 was 369 mboe/d, comprised of 43 mbbls/d of oil and liquids and 794 mmcf/d of gas from North America; 43 mbbls/d of oil and 510 mmcf/d of gas from Southeast Asia; 30 mbbls/d of oil and liquids and 20 mmcf/d of gas from the North Sea; and 24 mbbls/d of oil and liquids and 48 mmcf/d of gas from other areas.
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