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.
American Pacific's Sloan Ratio for the quarter that ended in Sep. 2013 was -5.46%.
As of Sep. 2013, American Pacific has a Sloan Ratio of -5.46%, indicating the company is in the safe zone and there is no funny business with accruals.
American Pacific Sloan Ratio % Historical Data
The historical data trend for American Pacific'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 American Pacific's Sloan Ratio %
For the Specialty Chemicals subindustry, American Pacific'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.
American Pacific's Sloan Ratio % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, American Pacific's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where American Pacific's Sloan Ratio % falls into.
American Pacific 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.
American Pacific's Sloan Ratio for the fiscal year that ended in Sep. 2013 is calculated as
American Pacific's Net Income for the trailing twelve months (TTM) ended in Sep. 2013 was 0.88 (Dec. 2012 ) + 2.109 (Mar. 2013 ) + 6.358 (Jun. 2013 ) + 8.196 (Sep. 2013 ) = €17.5 Mil.
American Pacific's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2013 was -2.493 (Dec. 2012 ) + 9.151 (Mar. 2013 ) + 29.636 (Jun. 2013 ) + 3.154 (Sep. 2013 ) = €39.4 Mil.
American Pacific's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2013 was -1.494 (Dec. 2012 ) + -3.003 (Mar. 2013 ) + -3.721 (Jun. 2013 ) + -2.361 (Sep. 2013 ) = €-10.6 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.
American Pacific (FRA:ACQ) 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. 2013, American Pacific has a Sloan Ratio of -5.46%, indicating the company is in the safe zone and there is no funny business with accruals.
American Pacific Sloan Ratio % Related Terms
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American Pacific Corporation was incorporated in Delaware in December 1980. The Company is a custom manufacturer of fine chemicals, specialty chemicals and propulsion products. It supplies active pharmaceutical ingredients and registered intermediates to the pharmaceutical industry. The pharmaceutical ingredients it manufacture are used by its customers in drugs with indications in three primary areas: anti-viral, oncology, and central nervous system. Its customers include pharmaceutical and biotechnology companies, as well as emerging pharmaceutical companies. Its continuing operations comprise three reportable business segments: Fine Chemicals, Specialty Chemicals, and Other Businesses. The Fine Chemicals segment is operated through its wholly-owned subsidiaries Ampac Fine Chemicals LLC and AMPAC Fine Chemicals Texas, LLC. Specialty Chemicals segment is principally engaged in the production of perchlorates, which include several grades of ammonium perchlorate, sodium perchlorate and potassium perchlorate. In addition, it produce and sell sodium azide, a chemical primarily used in pharmaceutical manufacturing, and Halotron, a series of clean fire extinguishing agents used in fire extinguishing products ranging from portable fire extinguishers to total flooding systems. For the aerospace and defense industry, it provides specialty chemicals used in solid rocket motors for space launch and military missiles. Other Businesses segment contains its water treatment equipment division and real estate activities PEPCON Systems, an operating division of the Company, is a manufacturer and supplier of On-Site Hypochlorite Generation systems.The Company design, manufacture and service equipment used to purify water or air in municipal, industrial and power generation applications. The systems are marketed under the ChlorMaster and Odormaster names. The main competing product to Halotron I is FE36 manufactured by DuPont. The Company's operations are subject to extensive federal, state and local regulations governing, among other things, emissions to air, discharges to water and waste management.
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