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.
The AES's Sloan Ratio for the quarter that ended in Dec. 2023 was 12.06%.
As of Dec. 2023, The AES has a Sloan Ratio of 12.06%, indicating there is a warning stage of accrual build up.
The AES Sloan Ratio % Historical Data
The historical data trend for The AES'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 Utilities - Diversified subindustry, The AES'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.
The AES's Sloan Ratio % Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, The AES's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where The AES's Sloan Ratio % falls into.
The AES 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.
The AES's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
The AES's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 151 (Mar. 2023 ) + -39 (Jun. 2023 ) + 231 (Sep. 2023 ) + -94 (Dec. 2023 ) = $249 Mil.
The AES's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 625 (Mar. 2023 ) + 562 (Jun. 2023 ) + 1122 (Sep. 2023 ) + 725 (Dec. 2023 ) = $3,034 Mil.
The AES's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -1624 (Mar. 2023 ) + -2126 (Jun. 2023 ) + -1923 (Sep. 2023 ) + -2515 (Dec. 2023 ) = $-8,188 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.
The AES (NYSE:AES) 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, The AES has a Sloan Ratio of 12.06%, indicating there is a warning stage of accrual build up.
The AES Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of The AES's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
AES is a global power company. Its current generation portfolio as of year-end 2022 consists of over 32 gigawatts of generation including renewable energy (46%), gas (32%), coal (20%), and oil (2%). AES has majority ownership and operates six electric utilities distributing power to 2.6 million customers.
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