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.
Lululemon Athletica's Sloan Ratio for the quarter that ended in Jan. 2024 was -1.30%.
As of Jan. 2024, Lululemon Athletica has a Sloan Ratio of -1.30%, indicating the company is in the safe zone and there is no funny business with accruals.
Lululemon Athletica Sloan Ratio % Historical Data
The historical data trend for Lululemon Athletica'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 Lululemon Athletica's Sloan Ratio %
For the Apparel Retail subindustry, Lululemon Athletica'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.
Lululemon Athletica's Sloan Ratio % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Lululemon Athletica's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Lululemon Athletica's Sloan Ratio % falls into.
Lululemon Athletica 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.
Lululemon Athletica's Sloan Ratio for the fiscal year that ended in Jan. 2024 is calculated as
Lululemon Athletica's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was 290.405 (Apr. 2023 ) + 341.603 (Jul. 2023 ) + 248.714 (Oct. 2023 ) + 669.468 (Jan. 2024 ) = $1,550 Mil.
Lululemon Athletica's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 45.503 (Apr. 2023 ) + 476.71 (Jul. 2023 ) + 389.853 (Oct. 2023 ) + 1384.098 (Jan. 2024 ) = $2,296 Mil.
Lululemon Athletica's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was -138.219 (Apr. 2023 ) + -145.441 (Jul. 2023 ) + -161.665 (Oct. 2023 ) + -208.807 (Jan. 2024 ) = $-654 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.
Lululemon Athletica (NAS:LULU) 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 Jan. 2024, Lululemon Athletica has a Sloan Ratio of -1.30%, indicating the company is in the safe zone and there is no funny business with accruals.
Lululemon Athletica Sloan Ratio % Related Terms
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Lululemon Athletica (Lululemon Athletica) Business Description
Lululemon Athletica designs, distributes, and markets athletic apparel, footwear, and accessories for women, men, and girls. Lululemon offers pants, shorts, tops, and jackets for both leisure and athletic activities such as yoga and running. The company also sells fitness accessories, such as bags, yoga mats, and equipment. Lululemon sells its products through more than 680 company-owned stores in 19 countries, e-commerce, outlets, and wholesale accounts. The company was founded in 1998 and is based in Vancouver, Canada.
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