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.
Education Management's Sloan Ratio for the quarter that ended in Jun. 2014 was -35.58%.
As of Jun. 2014, Education Management has a Sloan Ratio of -35.58%, indicating earnings are more likely to be made up of accruals.
Education Management Sloan Ratio % Historical Data
The historical data trend for Education Management'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 Education Management's Sloan Ratio %
For the Education & Training Services subindustry, Education Management'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.
Education Management's Sloan Ratio % Distribution in the Education Industry
For the Education industry and Consumer Defensive sector, Education Management's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Education Management's Sloan Ratio % falls into.
Education Management 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.
Education Management's Sloan Ratio for the fiscal year that ended in Jun. 2014 is calculated as
Education Management's Net Income for the trailing twelve months (TTM) ended in Jun. 2014 was -9.514 (Sep. 2013 ) + 1.089 (Dec. 2013 ) + -467.646 (Mar. 2014 ) + -187.845 (Jun. 2014 ) = $-664 Mil.
Education Management's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2014 was 127.207 (Sep. 2013 ) + -87.517 (Dec. 2013 ) + 132.485 (Mar. 2014 ) + -101.529 (Jun. 2014 ) = $71 Mil.
Education Management's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2014 was -17.405 (Sep. 2013 ) + -14.499 (Dec. 2013 ) + -12.465 (Mar. 2014 ) + -22.283 (Jun. 2014 ) = $-67 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.
Education Management (OTCPK:EDMCQ) 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 Jun. 2014, Education Management has a Sloan Ratio of -35.58%, indicating earnings are more likely to be made up of accruals.
Education Management Sloan Ratio % Related Terms
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Education Management (Education Management) Business Description
Education Management Corp provides post-secondary education in North America. It offers academic programs to students through campus-based and online instruction, or through a combination of both. The company operates in four segments including The Art Institutes; Argosy University; Brown Mackie Colleges and South University. The Art Institutes focus on applied arts in creative professions such as graphic design, media arts, and animation, culinary arts. Brown Mackie Colleges offer flexible Associate's and non-degree diploma programs that enable students to develop skills for entry-level positions in high-demand vocational specialties. South University offers academic programs in health profession and business disciplines, health sciences, nursing, criminal justice, psychology, and IT.
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