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.
Lumen Technologies's Sloan Ratio for the quarter that ended in Dec. 2023 was -33.09%.
Warning Sign:
When sloan ratio (-33.09)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2023, Lumen Technologies has a Sloan Ratio of -33.09%, indicating earnings are more likely to be made up of accruals.
Lumen Technologies Sloan Ratio % Historical Data
The historical data trend for Lumen Technologies'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 Lumen Technologies's Sloan Ratio %
For the Telecom Services subindustry, Lumen Technologies'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.
Lumen Technologies's Sloan Ratio % Distribution in the Telecommunication Services Industry
For the Telecommunication Services industry and Communication Services sector, Lumen Technologies's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Lumen Technologies's Sloan Ratio % falls into.
Lumen Technologies 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.
Lumen Technologies's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Lumen Technologies's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 511 (Mar. 2023 ) + -8736 (Jun. 2023 ) + -78 (Sep. 2023 ) + -1995 (Dec. 2023 ) = $-10,298 Mil.
Lumen Technologies's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 595 (Mar. 2023 ) + -100 (Jun. 2023 ) + 881 (Sep. 2023 ) + 784 (Dec. 2023 ) = $2,160 Mil.
Lumen Technologies's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -616 (Mar. 2023 ) + -789 (Jun. 2023 ) + -827 (Sep. 2023 ) + 1031 (Dec. 2023 ) = $-1,201 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.
Lumen Technologies (NYSE:LUMN) 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. 2023, Lumen Technologies has a Sloan Ratio of -33.09%, indicating earnings are more likely to be made up of accruals.
Lumen Technologies Sloan Ratio % Related Terms
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Lumen Technologies (Lumen Technologies) Business Description
With 450,000 route miles of fiber, including over 35,000 route miles of subsea fiber connecting Europe, Asia, and Latin America, Lumen Technologies is one of the United States' largest telecommunications carriers serving global enterprises. Its merger with Level 3 in 2017 and divestiture of much of its incumbent local exchange carrier, or ILEC, business in 2022 has shifted the company's operations away from its legacy consumer business and toward enterprises (now nearly 80% of revenue). Lumen offers businesses a full menu of communications services, providing colocation and data center services, data transportation, and end-user phone and internet service. On the consumer side, Lumen provides broadband and phone service across 37 states, where it has 4.5 million broadband customers.
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