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.
Beacon Roofing Supply's Sloan Ratio for the quarter that ended in Mar. 2024 was 2.73%.
As of Mar. 2024, Beacon Roofing Supply has a Sloan Ratio of 2.73%, indicating the company is in the safe zone and there is no funny business with accruals.
Beacon Roofing Supply Sloan Ratio % Historical Data
The historical data trend for Beacon Roofing Supply'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 Beacon Roofing Supply's Sloan Ratio %
For the Industrial Distribution subindustry, Beacon Roofing Supply'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.
Beacon Roofing Supply's Sloan Ratio % Distribution in the Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, Beacon Roofing Supply's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Beacon Roofing Supply's Sloan Ratio % falls into.
Beacon Roofing Supply 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.
Beacon Roofing Supply's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Beacon Roofing Supply's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 153.8 (Jun. 2023 ) + 161.3 (Sep. 2023 ) + 95.1 (Dec. 2023 ) + 5.6 (Mar. 2024 ) = $416 Mil.
Beacon Roofing Supply's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 257.5 (Jun. 2023 ) + 167 (Sep. 2023 ) + 262.1 (Dec. 2023 ) + -140.8 (Mar. 2024 ) = $546 Mil.
Beacon Roofing Supply's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -36.5 (Jun. 2023 ) + -63.9 (Sep. 2023 ) + -80.7 (Dec. 2023 ) + -135.1 (Mar. 2024 ) = $-316 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.
Beacon Roofing Supply (NAS:BECN) 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 Mar. 2024, Beacon Roofing Supply has a Sloan Ratio of 2.73%, indicating the company is in the safe zone and there is no funny business with accruals.
Beacon Roofing Supply Sloan Ratio % Related Terms
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Beacon Roofing Supply (Beacon Roofing Supply) Business Description
Beacon Roofing Supply Inc manufactures and sells roofing and building materials throughout the United States and Canada. Beacon's key customers consist of contractors, home builders, lumberyards, retailers, wholesale distributors, and building materials suppliers. The company's product portfolio includes both residential and non-residential roofing materials, siding, windows, and waterproofing systems. The majority of revenue is generated from residential and non-residential roofing products. The vast majority of Beacon's revenue comes from the United States.
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