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.
Echo Global Logistics's Sloan Ratio for the quarter that ended in Sep. 2021 was 0.79%.
As of Sep. 2021, Echo Global Logistics has a Sloan Ratio of 0.79%, indicating the company is in the safe zone and there is no funny business with accruals.
Echo Global Logistics Sloan Ratio % Historical Data
The historical data trend for Echo Global Logistics'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 Echo Global Logistics's Sloan Ratio %
For the Integrated Freight & Logistics subindustry, Echo Global Logistics'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.
Echo Global Logistics's Sloan Ratio % Distribution in the Transportation Industry
For the Transportation industry and Industrials sector, Echo Global Logistics's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Echo Global Logistics's Sloan Ratio % falls into.
Echo Global Logistics 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.
Echo Global Logistics's Sloan Ratio for the fiscal year that ended in Dec. 2020 is calculated as
Echo Global Logistics's Net Income for the trailing twelve months (TTM) ended in Sep. 2021 was 10.996 (Dec. 2020 ) + 10.196 (Mar. 2021 ) + 18.367 (Jun. 2021 ) + 18.925 (Sep. 2021 ) = $58 Mil.
Echo Global Logistics's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2021 was 10.403 (Dec. 2020 ) + 27.235 (Mar. 2021 ) + 27.101 (Jun. 2021 ) + 13.524 (Sep. 2021 ) = $78 Mil.
Echo Global Logistics's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2021 was -6.444 (Dec. 2020 ) + -8.19 (Mar. 2021 ) + -5.534 (Jun. 2021 ) + -8.381 (Sep. 2021 ) = $-29 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.
Echo Global Logistics (NAS:ECHO) 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 Sep. 2021, Echo Global Logistics has a Sloan Ratio of 0.79%, indicating the company is in the safe zone and there is no funny business with accruals.
Echo Global Logistics Sloan Ratio % Related Terms
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Echo Global Logistics (Echo Global Logistics) Business Description
Founded in 2005, Echo Global Logistics is an asset-light third-party logistics provider primarily focused on domestic truckload and less-than-truckload brokerage. It also offers intermodal and international air and ocean freight forwarding services, though to a lesser degree. Key strategic initiatives include gaining organic market share in the highly fragmented brokerage industry and supplementing its sales capabilities through tuck-in acquisitions. Echo completed its initial public offering in October 2009.
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