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.
As of Dec. 2023, Universal Music Group NV has a Sloan Ratio of -0.03%, indicating the company is in the safe zone and there is no funny business with accruals.
Universal Music Group NV Sloan Ratio % Historical Data
* 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 Universal Music Group NV's Sloan Ratio %
For the Entertainment subindustry, Universal Music Group NV'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.
Universal Music Group NV's Sloan Ratio % Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Universal Music Group NV's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Universal Music Group NV's Sloan Ratio % falls into.
Universal Music Group NV 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.
Universal Music Group NV's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Universal Music Group NV's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 625 (Jun. 2023 ) + 634 (Dec. 2023 ) = €1,259 Mil.
Universal Music Group NV's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 495 (Jun. 2023 ) + 1390 (Dec. 2023 ) = €1,885 Mil.
Universal Music Group NV's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -423 (Jun. 2023 ) + -199 (Dec. 2023 ) = €-622 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.
Universal Music Group NV (XAMS:UMG) 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, Universal Music Group NV has a Sloan Ratio of -0.03%, indicating the company is in the safe zone and there is no funny business with accruals.
Universal Music Group NV Sloan Ratio % Related Terms
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Universal Music Group NV (XAMS:UMG) Business Description
Universal Music Group is the largest of the three major global record labels with Sony Music in second and Warner Music in third. Universal's larger segment, recorded music, consists of iconic labels like Interscope, Capitol Music, Decca, EMI, and Motown and popular artists such as Drake, Taylor Swift, J Balvin, and Luke Bryan. Universal Music Publishing Group owns and administers almost 4 million compositions and is the second-largest music publisher behind Sony. Universal Music was spun out of Vivendi in September 2021, with 60% distributed to Vivendi shareholders, 20% to Tencent, 10% to Pershing Square Capital, and 10% remaining at Vivendi.
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