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.
New Oriental Education & Technology Group's Sloan Ratio for the quarter that ended in Nov. 2023 was -15.03%.
As of Nov. 2023, New Oriental Education & Technology Group has a Sloan Ratio of -15.03%, indicating there is a warning stage of accrual build up.
New Oriental Education & Technology Group Sloan Ratio % Historical Data
The historical data trend for New Oriental Education & Technology Group'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.
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New Oriental Education & Technology Group Annual Data
Trend
May14
May15
May16
May17
May18
May19
May20
May21
May22
May23
Sloan Ratio %
0.15
13.20
13.61
-17.83
-11.83
New Oriental Education & Technology Group Quarterly Data
Feb19
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
May23
Aug23
Nov23
Sloan Ratio %
2.97
0.54
-15.25
-15.18
-15.03
Competitive Comparison
For the Education & Training Services subindustry, New Oriental Education & Technology Group'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.
New Oriental Education & Technology Group Sloan Ratio % Distribution
For the Education industry and Consumer Defensive sector, New Oriental Education & Technology Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where New Oriental Education & Technology Group's Sloan Ratio % falls into.
New Oriental Education & Technology Group 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.
New Oriental Education & Technology Group's Sloan Ratio for the fiscal year that ended in May. 2023 is calculated as
New Oriental Education & Technology Group's Net Income for the trailing twelve months (TTM) ended in Nov. 2023 was 81.648 (Feb. 2023 ) + 28.959 (May. 2023 ) + 165.386 (Aug. 2023 ) + 30.066 (Nov. 2023 ) = $306 Mil.
New Oriental Education & Technology Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Nov. 2023 was 549.399 (Feb. 2023 ) + 780.526 (May. 2023 ) + 335.786 (Aug. 2023 ) + 300.586 (Nov. 2023 ) = $1,966 Mil.
New Oriental Education & Technology Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Nov. 2023 was -102.35 (Feb. 2023 ) + -184.56 (May. 2023 ) + -208.166 (Aug. 2023 ) + -93.031 (Nov. 2023 ) = $-588 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.
New Oriental Education & Technology Group (NYSE:EDU) 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 Nov. 2023, New Oriental Education & Technology Group has a Sloan Ratio of -15.03%, indicating there is a warning stage of accrual build up.
New Oriental Education & Technology Group Sloan Ratio % Related Terms
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New Oriental Education & Technology Group (New Oriental Education & Technology Group) Business Description
New Oriental is a leading private education provider in China. K-9 academic after-school tutoring used to account for 50%-60% of New Oriental's revenue before the regulatory crackdown in 2021. After terminating its K-9 academic after-school tutoring business, New Oriental has identified a few new initiatives such as nonacademic tutoring and intelligent learning systems and devices. The remaining businesses include high school academic after-school tutoring and overseas-related test preparation and consulting business. It also owns 55.7% of East Buy (HKG: 01797), a market leader in livestreaming e-commerce.
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