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.
Electro Rent's Sloan Ratio for the quarter that ended in Feb. 2016 was -5.35%.
As of Feb. 2016, Electro Rent has a Sloan Ratio of -5.35%, indicating the company is in the safe zone and there is no funny business with accruals.
Electro Rent Sloan Ratio % Historical Data
The historical data trend for Electro Rent'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 Electro Rent's Sloan Ratio %
For the Rental & Leasing Services subindustry, Electro Rent'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.
Electro Rent's Sloan Ratio % Distribution in the Business Services Industry
For the Business Services industry and Industrials sector, Electro Rent's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Electro Rent's Sloan Ratio % falls into.
Electro Rent 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.
Electro Rent's Sloan Ratio for the fiscal year that ended in May. 2015 is calculated as
Electro Rent's Net Income for the trailing twelve months (TTM) ended in Feb. 2016 was 3.441 (May. 2015 ) + 2.47 (Aug. 2015 ) + 2.19 (Nov. 2015 ) + 1.009 (Feb. 2016 ) = $9.1 Mil.
Electro Rent's Cash Flow from Operations for the trailing twelve months (TTM) ended in Feb. 2016 was 13.123 (May. 2015 ) + 16.654 (Aug. 2015 ) + 4.828 (Nov. 2015 ) + 14.715 (Feb. 2016 ) = $49.3 Mil.
Electro Rent's Cash Flow from Investing for the trailing twelve months (TTM) ended in Feb. 2016 was -14.716 (May. 2015 ) + -6.29 (Aug. 2015 ) + -3.93 (Nov. 2015 ) + 0.092 (Feb. 2016 ) = $-24.8 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.
Electro Rent (NAS:ELRC) 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 Feb. 2016, Electro Rent has a Sloan Ratio of -5.35%, indicating the company is in the safe zone and there is no funny business with accruals.
Electro Rent Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Electro Rent's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Electro Rent Corp was incorporated in California in 1965 and became a publicly held corporation in 1980. The Company rental, lease and sells of new and used electronic test and measurement equipment. The Company purchases that equipment from manufacturers such as Agilent and Tektronix primarily for use by its customers in the aerospace, telecommunications, defense, electronics, industrial and semiconductor industries. The Company data products division provides personal computers and servers from manufacturers including Dell, HP/Compaq, IBM, Toshiba and Apple. It has also expanded its rental, lease and sale of electrical test and inspection equipment used in the industrial industry, which includes electrical contractors and utility companies and their related support services providers. The Company's competitors in the North American T&M rental area include McGrath Rent Corp., Continental Resources, Test Equity and Microlease PLC. It competes for rental business with Microlease plc and Livingston Group Ltd. in Europe and Orix Corporation in Asia.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
ELRC has been successfully added to your 