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.
Hillshire Brands Co's Sloan Ratio for the quarter that ended in Jun. 2014 was 10.97%.
As of Jun. 2014, Hillshire Brands Co has a Sloan Ratio of 10.97%, indicating there is a warning stage of accrual build up.
Hillshire Brands Co Sloan Ratio % Historical Data
The historical data trend for Hillshire Brands Co'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 Hillshire Brands Co's Sloan Ratio %
For the Packaged Foods subindustry, Hillshire Brands Co'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.
Hillshire Brands Co's Sloan Ratio % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Hillshire Brands Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Hillshire Brands Co's Sloan Ratio % falls into.
Hillshire Brands Co 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.
Hillshire Brands Co's Sloan Ratio for the fiscal year that ended in Jun. 2013 is calculated as
Hillshire Brands Co's Net Income for the trailing twelve months (TTM) ended in Jun. 2014 was 29 (Sep. 2013 ) + 115 (Dec. 2013 ) + 42 (Mar. 2014 ) + 27 (Jun. 2014 ) = $213 Mil.
Hillshire Brands Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2014 was 59 (Sep. 2013 ) + 115 (Dec. 2013 ) + 58 (Mar. 2014 ) + 19 (Jun. 2014 ) = $251 Mil.
Hillshire Brands Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2014 was -256 (Sep. 2013 ) + -38 (Dec. 2013 ) + -19 (Mar. 2014 ) + -22 (Jun. 2014 ) = $-335 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.
Hillshire Brands Co (LSE:HSH) 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 Jun. 2014, Hillshire Brands Co has a Sloan Ratio of 10.97%, indicating there is a warning stage of accrual build up.
Hillshire Brands Co Sloan Ratio % Related Terms
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Hillshire Brands Co (LSE:HSH) Business Description
Hillshire Brands Co was organized as a corporation in Baltimore, Maryland in 1941 as The C.D. Kenny Company, was renamed Sara Lee Corporation in 1985 and adopted its current name in June 2012. It is a manufacturer and marketer of food products. It provides meat-centric food solutions for the retail and foodservice markets. The Company's Brands' portfolio includes iconic brands such as Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Sara Lee frozen bakery and Chef Pierre pies, as well as artisanal brands Aidells and Gallo Salame. Its operations are organized around two business segments - Retail and Foodservice/Other. Retail sells a variety of packaged meat and frozen bakery products to retail customers in North America. Products include hot dogs and corn dogs, breakfast sausages, breakfast convenience items, including breakfast sandwiches and bowls, dinner sausages, premium deli and luncheon meats and cooked hams, as well as frozen pies, cakes, cheesecakes and other desserts. The primary raw materials for the segment's products include pork and beef, which are purchased almost entirely from third party suppliers and independent farmers, and poultry. The branded meat business is highly competitive, with an emphasis on product quality, innovation and value. New product innovations are a key component to its success. The Retail segment competes with other international, national, regional and local companies in each of the product categories. Foodservice/Other sells a variety of meat and bakery products to foodservice customers in North America. Products include hot dogs and corn dogs, breakfast sausages and sandwiches, dinner sausages, premium deli and luncheon meats, ham, beef and turkey as well as a variety of bakery products, including pastries, muffins, frozen pies, cakes and cheesecakes. The primary raw materials for Foodservice/Other's products include pork, beef and poultry and, to a lesser extent, wheat flour, sugar, corn syrup, cooking oils, butter, fruit and eggs, which are purchased from independent suppliers and farmers. The Foodservice/Other segment competes with other international, national, regional and local companies in each of its product categories. It considers major mass retailers and supermarket chains in the United States to be its most significant customers. The Company is subject to regulations administered by the U.S. Department of Agriculture and the Food and Drug Administration.
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