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.
Wan Kei Group Holdings's Sloan Ratio for the quarter that ended in Sep. 2023 was -20.25%.
Warning Sign:
When sloan ratio (-28.21)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Sep. 2023, Wan Kei Group Holdings has a Sloan Ratio of -20.25%, indicating earnings are more likely to be made up of accruals.
Wan Kei Group Holdings 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 Wan Kei Group Holdings's Sloan Ratio %
For the Engineering & Construction subindustry, Wan Kei Group Holdings'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.
Wan Kei Group Holdings's Sloan Ratio % Distribution in the Construction Industry
For the Construction industry and Industrials sector, Wan Kei Group Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Wan Kei Group Holdings's Sloan Ratio % falls into.
Wan Kei Group Holdings 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.
Wan Kei Group Holdings's Sloan Ratio for the fiscal year that ended in Mar. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Wan Kei Group Holdings's Net Income for the trailing twelve months (TTM) ended in Sep. 2023 was -47.469 (Mar. 2023 ) + 18.378 (Sep. 2023 ) = HK$-29.1 Mil.
Wan Kei Group Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2023 was 4.406 (Mar. 2023 ) + 6.89 (Sep. 2023 ) = HK$11.3 Mil.
Wan Kei Group Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2023 was 24.972 (Mar. 2023 ) + 10.485 (Sep. 2023 ) = HK$35.5 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.
Wan Kei Group Holdings (HKSE:01718) 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. 2023, Wan Kei Group Holdings has a Sloan Ratio of -20.25%, indicating earnings are more likely to be made up of accruals.
Wan Kei Group Holdings Sloan Ratio % Related Terms
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Wan Kei Group Holdings (HKSE:01718) Business Description
Wan Kei Group Holdings Ltd is an engineering and construction company. It is engaged in the provision of foundation works including mini piles, pipe piles, and king posts. It also offers socketed steel, driven piles, and pre-drilling works. The operating business segments are Foundation Construction, Ground Investigation Services, Trading of beauty and skin care products and Financial Services. The Foundation construction segment provides foundation construction works to customers in Hong Kong, the Ground investigation services segment provides ground investigation services to customers in Hong Kong, Financial services segment provides investment, financing, and moneylending services. The company derives revenue mainly from the Foundation construction segment.
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