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 Mar. 2022 was -8.95%.
As of Mar. 2022, Meta Platforms has a Sloan Ratio of -8.95%, 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.
* Premium members only.
Meta Platforms Annual Data
Trend
Dec12
Dec13
Dec14
Dec15
Dec16
Dec17
Dec18
Dec19
Dec20
Dec21
Sloan Ratio %
14.00
4.56
1.53
12.84
-6.47
Meta Platforms Quarterly Data
Jun17
Sep17
Dec17
Mar18
Jun18
Sep18
Dec18
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
Sloan Ratio %
15.03
14.32
3.10
-6.47
-8.95
Competitive Comparison
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 Sloan Ratio % Distribution
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. 2021 is calculated as
Meta Platforms's Net Income for the trailing twelve months (TTM) ended in Mar. 2022 was 10394 (Jun. 2021 ) + 9194 (Sep. 2021 ) + 10285 (Dec. 2021 ) + 7465 (Mar. 2022 ) = $37,338 Mil.
Meta Platforms's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2022 was 13247 (Jun. 2021 ) + 14090 (Sep. 2021 ) + 18104 (Dec. 2021 ) + 14076 (Mar. 2022 ) = $59,517 Mil.
Meta Platforms's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2022 was -8195 (Jun. 2021 ) + -330 (Sep. 2021 ) + 5829 (Dec. 2021 ) + -4779 (Mar. 2022 ) = $-7,475 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 (NAS:FB) 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. 2022, Meta Platforms has a Sloan Ratio of -8.95%, indicating the company is in the safe zone and there is no funny business with accruals.
Meta Platforms Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Meta Platforms's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Meta is the world's largest online social network, with 2.5 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue. Meta refers to this as Facebook Watch. The firm's ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the firm's total revenue, with 50% coming from the U.S. and Canada and 25% from Europe. With gross margins above 80%, Meta operates at a 30%-plus margin.
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