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.
Merlin Entertainments's Sloan Ratio for the quarter that ended in Jun. 2019 was 1.04%.
As of Jun. 2019, Merlin Entertainments has a Sloan Ratio of 1.04%, indicating the company is in the safe zone and there is no funny business with accruals.
Merlin Entertainments Sloan Ratio % Historical Data
The historical data trend for Merlin Entertainments'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 Merlin Entertainments's Sloan Ratio %
For the Entertainment subindustry, Merlin Entertainments'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.
Merlin Entertainments's Sloan Ratio % Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Merlin Entertainments's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Merlin Entertainments's Sloan Ratio % falls into.
Merlin Entertainments 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.
Merlin Entertainments's Sloan Ratio for the fiscal year that ended in Dec. 2018 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Merlin Entertainments's Net Income for the trailing twelve months (TTM) ended in Jun. 2019 was 202 (Dec. 2018 ) + 66 (Jun. 2019 ) = £268 Mil.
Merlin Entertainments's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2019 was 208 (Dec. 2018 ) + 208 (Jun. 2019 ) = £416 Mil.
Merlin Entertainments's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2019 was -127 (Dec. 2018 ) + -70 (Jun. 2019 ) = £-197 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.
Merlin Entertainments (LSE:MERL) 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 Jun. 2019, Merlin Entertainments has a Sloan Ratio of 1.04%, indicating the company is in the safe zone and there is no funny business with accruals.
Merlin Entertainments Sloan Ratio % Related Terms
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Merlin Entertainments (LSE:MERL) Business Description
Merlin Entertainments PLC is a diversified media company that primarily operates theme parks. Merlin has three business segments: Midway Attractions, LEGOLAND Parks, and Resort Theme Parks. The Midway Attractions segment, which accounts for the largest percentage of revenue, operates 100 attractions globally that are typically smaller, indoor venues. These brands include Madame Tussauds, The London Eye, and the London Dungeon. The LEGOLAND segment operates several large LEGO-based theme parks around the world. These parks are either owned, leased, or under operational control through a management contract. The Resort Theme Park segment operates other large, outdoor entertainment-based attractions.
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