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.
eFuture Holding's Sloan Ratio for the quarter that ended in Sep. 2016 was 5.96%.
As of Sep. 2016, eFuture Holding has a Sloan Ratio of 5.96%, indicating the company is in the safe zone and there is no funny business with accruals.
eFuture Holding Sloan Ratio % Historical Data
The historical data trend for eFuture Holding'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 eFuture Holding's Sloan Ratio %
For the Software - Application subindustry, eFuture Holding'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.
eFuture Holding's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, eFuture Holding's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where eFuture Holding's Sloan Ratio % falls into.
eFuture Holding 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.
eFuture Holding's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
eFuture Holding's Net Income for the trailing twelve months (TTM) ended in Sep. 2016 was 3.527 (Dec. 2015 ) + -1.802 (Mar. 2016 ) + -0.864 (Jun. 2016 ) + -1.133 (Sep. 2016 ) = $-0.27 Mil.
eFuture Holding's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2016 was 7.817 (Dec. 2015 ) + -9.432 (Mar. 2016 ) + 0.178 (Jun. 2016 ) + -0.377 (Sep. 2016 ) = $-1.81 Mil.
eFuture Holding's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2016 was -1.071 (Dec. 2015 ) + -0.304 (Mar. 2016 ) + 0.608 (Jun. 2016 ) + 0.03 (Sep. 2016 ) = $-0.74 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.
eFuture Holding (NAS:EFUT) 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 Sep. 2016, eFuture Holding has a Sloan Ratio of 5.96%, indicating the company is in the safe zone and there is no funny business with accruals.
eFuture Holding Sloan Ratio % Related Terms
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eFuture Holding (eFuture Holding) Business Description
E-Future Information Technology, Inc., established under the Cayman Islands Companies Law on November 2, 2000. The Company changed its name from 'e-Future Information Technology Inc.' to 'eFuture Information Technology Inc.' in December 2008. It provides software and services to China's retail and consumer goods industries. It offers one-stop, end-to-end integrated portfolio of software and services from factory to consumer on seven verticals: Fast Moving Consumer Goods (FMCG), Department Store, Shopping Mall, Grocery, Logistics, Specialty Store and Online Retailers. Its clients include manufacturers, distributors, resellers, logistics companies and retailers. The Company's client base encompasses corporations such as Procter & Gamble, Pepsi, L'Oreal, Kimberly-Clark, Gucci and B&Q as well as Chinese companies. The Company has three business lines: software, professional services and cloud service. Its software solutions include the management of merchandizing, distribution, warehousing, supply chains, customer relationships, logistics and points of sale. It consists of three deployable groups of products: Foundation Solutions, Collaborative Solutions and Intelligent Solutions. Foundation Solutions - are used to meet client needs for services such as retail management, point of sale ('POS'), distribution management, logistics management, warehouse management, vendor payment and control and loyalty card management. Collaborative Solutions - are used to meet client needs for services such as visual SCM and visual process management systems. Depending on the type of customer and their needs, clients use a variety of Collaborative Solutions. Intelligent Solutions - are used to meet client needs for services such as business intelligence, brand analysis, supplier relationship management and customer relationship management systems. Professional Services includes recurring maintenance and support services on existing software installations, delivery services, consulting services and outsourcing services. Maintenance and Support Service - is provided following the installation of its software solutions, as clients will typically require ongoing maintenance support and software upgrades to ensure the efficient operation of their system. Consulting Service - is provided by its consulting services group which consists of business consultants, systems analysts and technical personnel. Outsourcing Service - is flexible by design to meet its clients' changing requirements. Cloud Service consists of cloud services based on cloud computing architecture, such as Salesforce Automation. Its regional service centers in Beijing, Shanghai, Guangzhou, Wuhan, Qingdao, Xi'an, Fuzhou, Hangzhou, Nanjing, Chongqing and Shenzhen.
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