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.
Arrow Electronics's Sloan Ratio for the quarter that ended in Dec. 2023 was 1.24%.
As of Dec. 2023, Arrow Electronics has a Sloan Ratio of 1.24%, indicating the company is in the safe zone and there is no funny business with accruals.
Arrow Electronics Sloan Ratio % Historical Data
The historical data trend for Arrow Electronics'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 Arrow Electronics's Sloan Ratio %
For the Electronics & Computer Distribution subindustry, Arrow Electronics'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.
Arrow Electronics's Sloan Ratio % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Arrow Electronics's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Arrow Electronics's Sloan Ratio % falls into.
Arrow Electronics 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.
Arrow Electronics's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Arrow Electronics's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 273.75 (Mar. 2023 ) + 236.559 (Jun. 2023 ) + 198.659 (Sep. 2023 ) + 194.537 (Dec. 2023 ) = $904 Mil.
Arrow Electronics's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 223.804 (Mar. 2023 ) + -126.804 (Jun. 2023 ) + 321.707 (Sep. 2023 ) + 286.742 (Dec. 2023 ) = $705 Mil.
Arrow Electronics's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -9.247 (Mar. 2023 ) + -16.896 (Jun. 2023 ) + -20.67 (Sep. 2023 ) + -25.51 (Dec. 2023 ) = $-72 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.
Arrow Electronics (NYSE:ARW) 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, Arrow Electronics has a Sloan Ratio of 1.24%, indicating the company is in the safe zone and there is no funny business with accruals.
Arrow Electronics Sloan Ratio % Related Terms
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Arrow Electronics (Arrow Electronics) Business Description
Arrow Electronics Inc. is a provider of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. It has one of the world's broadest portfolios of product offerings available from electronic components and enterprise computing solutions suppliers, coupled with a range of services, solutions, and software, the company helps industrial and commercial customers introduce products, reduce their time to market, and enhance their overall competitiveness. The company has two business segments, the components business and the enterprise computing solutions.
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