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.
As of Dec. 2023, Advanced Energy Industries has a Sloan Ratio of -0.62%, indicating the company is in the safe zone and there is no funny business with accruals.
Advanced Energy Industries 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 Advanced Energy Industries's Sloan Ratio %
For the Electrical Equipment & Parts subindustry, Advanced Energy Industries'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.
Advanced Energy Industries's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Advanced Energy Industries's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Advanced Energy Industries's Sloan Ratio % falls into.
Advanced Energy Industries 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.
Advanced Energy Industries's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 30.921 (Mar. 2023 ) + 27.14 (Jun. 2023 ) + 32.721 (Sep. 2023 ) + 37.502 (Dec. 2023 ) = $128 Mil.
Advanced Energy Industries's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 29.811 (Mar. 2023 ) + 22.603 (Jun. 2023 ) + 72.519 (Sep. 2023 ) + 84.004 (Dec. 2023 ) = $209 Mil.
Advanced Energy Industries's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -16.21 (Mar. 2023 ) + -20.541 (Jun. 2023 ) + -13.478 (Sep. 2023 ) + -14.522 (Dec. 2023 ) = $-65 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.
Advanced Energy Industries (NAS:AEIS) 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, Advanced Energy Industries has a Sloan Ratio of -0.62%, indicating the company is in the safe zone and there is no funny business with accruals.
Advanced Energy Industries Sloan Ratio % Related Terms
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Advanced Energy Industries (Advanced Energy Industries) Business Description
Advanced Energy Industries Inc provides precision power-conversion measurement and control solutions that transform power into various forms for use in manufacturing and industrial equipment and applications. The firm serves original equipment manufacturers and end customers in the semiconductor, flat panel display, solar panel, and other industrial capital equipment markets. Products include thin-film power-conversion systems, which control and modify raw electrical power into a customizable, predictable power source, and power control modules, which control and measure temperature during manufacturing cycles. A majority of the firm's revenue is generated in the United States, with the rest primarily from Asia and Europe.
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