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.
Books-A-Million's Sloan Ratio for the quarter that ended in Oct. 2015 was -1.56%.
As of Oct. 2015, Books-A-Million has a Sloan Ratio of -1.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Books-A-Million Sloan Ratio % Historical Data
The historical data trend for Books-A-Million'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 Specialty Retail subindustry, Books-A-Million'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.
Books-A-Million Sloan Ratio % Distribution
For the Retail - Cyclical industry and Consumer Cyclical sector, Books-A-Million's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Books-A-Million's Sloan Ratio % falls into.
Books-A-Million 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.
Books-A-Million's Sloan Ratio for the fiscal year that ended in Jan. 2015 is calculated as
Books-A-Million's Net Income for the trailing twelve months (TTM) ended in Oct. 2015 was 19.025 (Jan. 2015 ) + -5.283 (Apr. 2015 ) + -5.809 (Jul. 2015 ) + -7.117 (Oct. 2015 ) = $0.8 Mil.
Books-A-Million's Cash Flow from Operations for the trailing twelve months (TTM) ended in Oct. 2015 was 38.728 (Jan. 2015 ) + -17.102 (Apr. 2015 ) + 6.398 (Jul. 2015 ) + -9.851 (Oct. 2015 ) = $18.2 Mil.
Books-A-Million's Cash Flow from Investing for the trailing twelve months (TTM) ended in Oct. 2015 was -3.82 (Jan. 2015 ) + -3.547 (Apr. 2015 ) + -1.994 (Jul. 2015 ) + -2.821 (Oct. 2015 ) = $-12.2 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.
Books-A-Million (NAS:BAMM) 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 Oct. 2015, Books-A-Million has a Sloan Ratio of -1.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Books-A-Million Sloan Ratio % Related Terms
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Books-A-Million (Books-A-Million) Business Description
Books-A-Million Inc was founded in 1917, originally incorporated under the laws of the State of Alabama in 1964 and reincorporated in Delaware in September 1992. The Company is a book retailer located in the eastern United States and operates both superstores and traditional bookstores. The Company operates both superstores and traditional bookstores. The first Superstore was opened in 1987 and operates under the names Books-A-Million and Books and Co. and 2nd & Charles. Traditional bookstores are smaller stores operated under the names Bookland, Books-A-Million and BAM. All store formats generally offer a selection of sellers and other hardcover and paperback books, magazines, toys, games, electronics and gifts. In addition to these retail store formats, it offers its products over the internet at Booksamillion.com. Its retail operations also include the operation of Yogurt Mountain Holding, LLC, a retailer and franchisor of self-serve frozen yogurt stores. It also develops and manages commercial real estate investments through its subsidiary, Preferred Growth Properties, LLC. The Company operates in three reportable operating segments: Retail trade; Electronic commerce trade; and Real estate development and management. In the retail trade segment, it is engaged in the retail sale of books, magazines and general merchandise, including gifts, cards, games, toys, collectibles, music, DVDs, electronic devices and accessories in its retail stores. In the electronic commerce trade segment, it is engaged in the retail sale of books and general merchandise over the internet. The real estate development and management segment is managed separately from the retail trade and electronic commerce trade segments, with a focus on deriving revenues through developing and leasing commercial retail real estate for purposes of earning rental income. The Company promotes its bookstores through the use of traditional direct mail, e-mail and online advertising, as well as point-of-sale materials posted and distributed in its stores. The retail book business is competitive. The Company faces direct competition from other superstores, such as Barnes & Noble, and it also faces competition from mass merchandisers, such as Wal-Mart and Costco, and online retailers, such as Amazon.com, Barnes & Noble and Wal-Mart. Its bookstores also compete with specialty retail stores that offer books in particular subject areas, independent single store operators, variety discounters, drugstores, warehouse clubs, mail order clubs and other retailers offering books. In addition, its bookstores face additional competition from the market for electronic books and may face competition from other categories of retailers entering the retail book market. The Company is subject to general business regulations and laws, as well as regulations and laws specifically governing the Internet and e-commerce.
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