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.
AAR's Sloan Ratio for the quarter that ended in Feb. 2024 was 6.61%.
As of Feb. 2024, AAR has a Sloan Ratio of 6.61%, indicating the company is in the safe zone and there is no funny business with accruals.
AAR Sloan Ratio % Historical Data
The historical data trend for AAR'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 Aerospace & Defense subindustry, AAR'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.
AAR's Sloan Ratio % Distribution in the Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, AAR's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where AAR's Sloan Ratio % falls into.
AAR 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.
AAR's Sloan Ratio for the fiscal year that ended in May. 2023 is calculated as
AAR's Net Income for the trailing twelve months (TTM) ended in Feb. 2024 was 23.2 (May. 2023 ) + -0.6 (Aug. 2023 ) + 23.8 (Nov. 2023 ) + 14 (Feb. 2024 ) = $60 Mil.
AAR's Cash Flow from Operations for the trailing twelve months (TTM) ended in Feb. 2024 was 45.2 (May. 2023 ) + -18.7 (Aug. 2023 ) + 17.4 (Nov. 2023 ) + 20.4 (Feb. 2024 ) = $64 Mil.
AAR's Cash Flow from Investing for the trailing twelve months (TTM) ended in Feb. 2024 was -110.7 (May. 2023 ) + -11.6 (Aug. 2023 ) + -8.7 (Nov. 2023 ) + -6.5 (Feb. 2024 ) = $-138 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.
AAR (NYSE:AIR) 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 Feb. 2024, AAR has a Sloan Ratio of 6.61%, indicating the company is in the safe zone and there is no funny business with accruals.
AAR Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of AAR's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
AAR Corp is engaged in providing products and services to aviation, government, and defense market. It operates in two segments namely Aviation Services and Expeditionary Services. The Aviation Services segment consists of aftermarket support and services businesses that provide spares and maintenance support for aircraft operated by it's commercial and government/defense customers. The Expeditionary Services segment consists of businesses that provide products and services supporting the movement of equipment and personnel by the U.S. Department of Defense, foreign governments, and non-governmental organizations. It generates a majority of its revenue from the Aviation Services Segment.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
AIR has been successfully added to your 