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.
First Capital Bancorp's Sloan Ratio for the quarter that ended in Sep. 2015 was 4.44%.
As of Sep. 2015, First Capital Bancorp has a Sloan Ratio of 4.44%, indicating the company is in the safe zone and there is no funny business with accruals.
First Capital Bancorp Sloan Ratio % Historical Data
The historical data trend for First Capital Bancorp'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 First Capital Bancorp's Sloan Ratio %
For the Banks - Regional subindustry, First Capital Bancorp'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.
First Capital Bancorp's Sloan Ratio % Distribution in the Banks Industry
For the Banks industry and Financial Services sector, First Capital Bancorp's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where First Capital Bancorp's Sloan Ratio % falls into.
First Capital Bancorp 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.
First Capital Bancorp's Sloan Ratio for the fiscal year that ended in Dec. 2014 is calculated as
First Capital Bancorp's Net Income for the trailing twelve months (TTM) ended in Sep. 2015 was 1.251 (Dec. 2014 ) + 1.064 (Mar. 2015 ) + 1.167 (Jun. 2015 ) + 1.279 (Sep. 2015 ) = $4.76 Mil.
First Capital Bancorp's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2015 was 4.083 (Dec. 2014 ) + 0.02 (Mar. 2015 ) + 1.224 (Jun. 2015 ) + 3.025 (Sep. 2015 ) = $8.35 Mil.
First Capital Bancorp's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2015 was -14.174 (Dec. 2014 ) + 4.694 (Mar. 2015 ) + -20.575 (Jun. 2015 ) + -1.225 (Sep. 2015 ) = $-31.28 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.
First Capital Bancorp (NAS:FCVA) 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. 2015, First Capital Bancorp has a Sloan Ratio of 4.44%, indicating the company is in the safe zone and there is no funny business with accruals.
First Capital Bancorp Sloan Ratio % Related Terms
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First Capital Bancorp (First Capital Bancorp) Business Description
First Capital Bancorp Inc was incorporated under Virginia law in 2006. The Company is a bank holding company and conducts its operations through its wholly-owned subsidiary, First Capital Bank. The Bank is a community oriented financial institution that offers a range of banking and related financial services to small and medium-sized businesses, professionals and individuals located in its market area, which consists of the Richmond, Virginia metropolitan area, with a current emphasis on western Henrico County, Chesterfield County, the City of Richmond, the Town of Ashland, and the surrounding vicinity. It offers a range of deposit services including checking accounts, NOW accounts, savings accounts and other time deposits of various types, ranging from daily money market accounts to longer-term certificates of deposit. The transaction accounts and time certificates are tailored to its market area at rates competitive to those offered in the area. In addition, it offers certain retirement account services, such as Individual Retirement Accounts, or IRAs. The Bank also offers a range of short-to-medium term commercial and consumer loans. Commercial loans include both secured and unsecured loans for working capital, including inventory and receivables; business expansion, including acquisition of real estate and improvements; and purchase of equipment and machinery; Consumer loans include secured and unsecured loans for financing automobiles, home improvements, education and personal investments. It originates fixed and floating-rate mortgage and real estate construction and acquisition loans. Other services it offers include safe deposit boxes, certain cash management services, traveler's checks, direct deposit of payroll and social security checks and automatic drafts for various accounts, selected on-line banking services and a small and medium-sized businesses courier service. The Company competes with other commercial banks, savings and loan associations, credit unions, mortgage banking firms, consumer finance companies, securities brokerage firms, insurance companies, money market mutual funds and other financial institutions operating in the Richmond metropolitan area and elsewhere. As a bank holding company, the Company is subject to regulation under the Bank Holding Company Act of 1956, as amended, and the examination and reporting requirements of the Board of Governors of the Federal Reserve System.
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