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.
As of Feb. 2024, FactSet Research Systems has a Sloan Ratio of -1.29%, indicating the company is in the safe zone and there is no funny business with accruals.
FactSet Research Systems Sloan Ratio % Historical Data
* 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 FactSet Research Systems's Sloan Ratio %
For the Financial Data & Stock Exchanges subindustry, FactSet Research Systems'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.
FactSet Research Systems's Sloan Ratio % Distribution in the Capital Markets Industry
For the Capital Markets industry and Financial Services sector, FactSet Research Systems's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where FactSet Research Systems's Sloan Ratio % falls into.
FactSet Research Systems 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.
FactSet Research Systems's Sloan Ratio for the fiscal year that ended in Aug. 2023 is calculated as
FactSet Research Systems's Net Income for the trailing twelve months (TTM) ended in Feb. 2024 was 134.663 (May. 2023 ) + 65.119 (Aug. 2023 ) + 148.555 (Nov. 2023 ) + 140.94 (Feb. 2024 ) = $489 Mil.
FactSet Research Systems's Cash Flow from Operations for the trailing twelve months (TTM) ended in Feb. 2024 was 218.589 (May. 2023 ) + 155.67 (Aug. 2023 ) + 155.144 (Nov. 2023 ) + 143.798 (Feb. 2024 ) = $673 Mil.
FactSet Research Systems's Cash Flow from Investing for the trailing twelve months (TTM) ended in Feb. 2024 was -26.005 (May. 2023 ) + -23.083 (Aug. 2023 ) + -25.219 (Nov. 2023 ) + -58.1 (Feb. 2024 ) = $-132 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.
FactSet Research Systems (NYSE:FDS) 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. 2024, FactSet Research Systems has a Sloan Ratio of -1.29%, indicating the company is in the safe zone and there is no funny business with accruals.
FactSet Research Systems Sloan Ratio % Related Terms
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FactSet Research Systems (FactSet Research Systems) Business Description
FactSet provides financial data and portfolio analytics to the Global investment community. The company aggregates data from third-party data suppliers, news sources, exchanges, brokerages, and contributors into its workstations. In addition, it provides essential portfolio analytics that companies use to monitor portfolios and address reporting requirements. Buy-side clients account for 82% of FactSet's annual subscription value. In 2015, the company acquired Portware, a provider of trade execution software. In 2017, it acquired BISAM, a risk management and performance measurement provider. In 2022, it completed its purchase of CUSIP Global Services.
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