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.
AvalonBay Communities's Sloan Ratio for the quarter that ended in Dec. 2023 was 1.44%.
As of Dec. 2023, AvalonBay Communities has a Sloan Ratio of 1.44%, indicating the company is in the safe zone and there is no funny business with accruals.
AvalonBay Communities Sloan Ratio % Historical Data
The historical data trend for AvalonBay Communities'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 AvalonBay Communities's Sloan Ratio %
For the REIT - Residential subindustry, AvalonBay Communities'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.
AvalonBay Communities's Sloan Ratio % Distribution in the REITs Industry
For the REITs industry and Real Estate sector, AvalonBay Communities's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where AvalonBay Communities's Sloan Ratio % falls into.
AvalonBay Communities 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.
AvalonBay Communities's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
AvalonBay Communities's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 146.902 (Mar. 2023 ) + 367.923 (Jun. 2023 ) + 172.031 (Sep. 2023 ) + 241.969 (Dec. 2023 ) = $929 Mil.
AvalonBay Communities's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 396.118 (Mar. 2023 ) + 346.461 (Jun. 2023 ) + 471.263 (Sep. 2023 ) + 346.187 (Dec. 2023 ) = $1,560 Mil.
AvalonBay Communities's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -267.339 (Mar. 2023 ) + -30.538 (Jun. 2023 ) + -284.987 (Sep. 2023 ) + -346.091 (Dec. 2023 ) = $-929 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.
AvalonBay Communities (NYSE:AVB) 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, AvalonBay Communities has a Sloan Ratio of 1.44%, indicating the company is in the safe zone and there is no funny business with accruals.
AvalonBay Communities Sloan Ratio % Related Terms
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AvalonBay Communities (AvalonBay Communities) Business Description
AvalonBay Communities owns a portfolio of 276 apartment communities with over 82,000 units and is developing 18 additional properties with over 5,700 units. The company focuses on owning large, high-quality properties in major metropolitan areas of New England, New York/New Jersey, Washington D.C., California, and the Pacific Northwest.
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