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.
Credit Acceptance's Sloan Ratio for the quarter that ended in Dec. 2023 was 6.56%.
As of Dec. 2023, Credit Acceptance has a Sloan Ratio of 6.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Credit Acceptance Sloan Ratio % Historical Data
The historical data trend for Credit Acceptance'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 Credit Acceptance's Sloan Ratio %
For the Credit Services subindustry, Credit Acceptance'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.
Credit Acceptance's Sloan Ratio % Distribution in the Credit Services Industry
For the Credit Services industry and Financial Services sector, Credit Acceptance's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Credit Acceptance's Sloan Ratio % falls into.
Credit Acceptance 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.
Credit Acceptance's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Credit Acceptance's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 99.5 (Mar. 2023 ) + 22.2 (Jun. 2023 ) + 70.8 (Sep. 2023 ) + 93.6 (Dec. 2023 ) = $286 Mil.
Credit Acceptance's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 296.5 (Mar. 2023 ) + 282.7 (Jun. 2023 ) + 313.4 (Sep. 2023 ) + 311.2 (Dec. 2023 ) = $1,204 Mil.
Credit Acceptance's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -344.2 (Mar. 2023 ) + -367.8 (Jun. 2023 ) + -359.9 (Sep. 2023 ) + -344.9 (Dec. 2023 ) = $-1,417 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.
Credit Acceptance (NAS:CACC) 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, Credit Acceptance has a Sloan Ratio of 6.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Credit Acceptance Sloan Ratio % Related Terms
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Credit Acceptance (Credit Acceptance) Business Description
Credit Acceptance Corp is a consumer finance company that specializes in automobile loans. These loans are offered through a U.S. nationwide network of automobile dealers that benefit from sales of vehicles to consumers who could otherwise not obtain financing. The company also benefits from repeat and referral sales, and from sales to customers responding to advertisements for financing, but qualify for traditional financing. The company derives its revenue from finance charges, premiums earned on the reinsurance of vehicle service contracts, and other fees. Of these, financing charges, including servicing fees, are by far the largest source of revenue.
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