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.
Rolls-Royce Holdings's Sloan Ratio for the quarter that ended in Dec. 2023 was 2.07%.
As of Dec. 2023, Rolls-Royce Holdings has a Sloan Ratio of 2.07%, indicating the company is in the safe zone and there is no funny business with accruals.
Rolls-Royce Holdings Sloan Ratio % Historical Data
The historical data trend for Rolls-Royce Holdings'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 Rolls-Royce Holdings's Sloan Ratio %
For the Aerospace & Defense subindustry, Rolls-Royce 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.
Rolls-Royce Holdings's Sloan Ratio % Distribution in the Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Rolls-Royce Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Rolls-Royce Holdings's Sloan Ratio % falls into.
Rolls-Royce 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.
Rolls-Royce Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Rolls-Royce Holdings's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 1551.768 (Jun. 2023 ) + 1497.468 (Dec. 2023 ) = $3,049 Mil.
Rolls-Royce Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 1433.081 (Jun. 2023 ) + 1708.861 (Dec. 2023 ) = $3,142 Mil.
Rolls-Royce Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -368.687 (Jun. 2023 ) + -549.367 (Dec. 2023 ) = $-918 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.
Rolls-Royce Holdings (OTCPK:RYCEY) 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 Dec. 2023, Rolls-Royce Holdings has a Sloan Ratio of 2.07%, indicating the company is in the safe zone and there is no funny business with accruals.
Rolls-Royce Holdings Sloan Ratio % Related Terms
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Rolls-Royce Holdings (Rolls-Royce Holdings) Business Description
Rolls-Royce operates three core business segments: civil aerospace, power systems, and defense. The civil aerospace segment builds engines powering wide-body aircraft, regional and business jets, and offers aftermarket services. Twenty years ago, the firm pioneered full-service flight hour contracts with the TotalCare package. Power systems provides power solutions to multiple end markets (defense, agriculture, marine, and power generation) while the defense business provides military, ground vehicle and naval propulsion solutions.
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