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.
SKF AB's Sloan Ratio for the quarter that ended in Mar. 2024 was -0.98%.
As of Mar. 2024, SKF AB has a Sloan Ratio of -0.98%, indicating the company is in the safe zone and there is no funny business with accruals.
SKF AB Sloan Ratio % Historical Data
The historical data trend for SKF AB'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.
For the Tools & Accessories subindustry, SKF AB'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.
SKF AB's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, SKF AB's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where SKF AB's Sloan Ratio % falls into.
SKF AB 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.
SKF AB's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
SKF AB's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 189.617 (Jun. 2023 ) + 149.484 (Sep. 2023 ) + 60.833 (Dec. 2023 ) + 181.341 (Mar. 2024 ) = $581 Mil.
SKF AB's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 340.233 (Jun. 2023 ) + 309.884 (Sep. 2023 ) + 383.813 (Dec. 2023 ) + 171.064 (Mar. 2024 ) = $1,205 Mil.
SKF AB's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -152.566 (Jun. 2023 ) + -99.957 (Sep. 2023 ) + -163.976 (Dec. 2023 ) + -94.993 (Mar. 2024 ) = $-511 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.
SKF AB (OTCPK:SKFRY) 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 Mar. 2024, SKF AB has a Sloan Ratio of -0.98%, indicating the company is in the safe zone and there is no funny business with accruals.
SKF AB Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of SKF AB's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
SKF's history goes back to the first major patents in ball bearings, when in 1907 it was the first to patent the self-aligning ball bearing. SKF, along with the Schaeffler Group, are the top two global ball bearing suppliers followed by Timken, NSK, NTN, and JTEKT. Combined, these six companies supply about 60% of the world's ball bearings. However, most of them have sector niches as ball bearings for industrial purposes are engineered for specific applications. SKF is based out of Sweden and has a global manufacturing footprint of 106 sites and about 17,000 global distributor locations. The firm operates under two segments: industrials, which has a fairly fragmented customer base; and automotive, which is the opposite, with a concentrated customer base including the likes of Tesla.
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