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.
FirstMerit's Sloan Ratio for the quarter that ended in Jun. 2016 was 2.74%.
As of Jun. 2016, FirstMerit has a Sloan Ratio of 2.74%, indicating the company is in the safe zone and there is no funny business with accruals.
FirstMerit Sloan Ratio % Historical Data
The historical data trend for FirstMerit'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 FirstMerit's Sloan Ratio %
For the Banks - Regional subindustry, FirstMerit'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.
FirstMerit's Sloan Ratio % Distribution in the Banks Industry
For the Banks industry and Financial Services sector, FirstMerit's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where FirstMerit's Sloan Ratio % falls into.
FirstMerit 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.
FirstMerit's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
FirstMerit's Net Income for the trailing twelve months (TTM) ended in Jun. 2016 was 59.012 (Sep. 2015 ) + 56.749 (Dec. 2015 ) + 54.136 (Mar. 2016 ) + 58.309 (Jun. 2016 ) = $228 Mil.
FirstMerit's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2016 was 75.718 (Sep. 2015 ) + 89.356 (Dec. 2015 ) + 35.748 (Mar. 2016 ) + 103.014 (Jun. 2016 ) = $304 Mil.
FirstMerit's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2016 was -74.363 (Sep. 2015 ) + -321.711 (Dec. 2015 ) + -183.668 (Mar. 2016 ) + -213.499 (Jun. 2016 ) = $-793 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.
FirstMerit (NAS:FMER) 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 Jun. 2016, FirstMerit has a Sloan Ratio of 2.74%, indicating the company is in the safe zone and there is no funny business with accruals.
FirstMerit Sloan Ratio % Related Terms
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Firstmerit Corp was organized in 1981 under the laws of the State of Ohio, It is a bank holding company. It operates through the Bank and its other subsidiaries, providing banking, fiduciary, financial, insurance and investment services to corporate, institutional and individual customers throughout Ohio, Chicago, Illinois, Michigan, Wisconsin and Western Pennsylvania. The Company manages its operations through the following primary lines of business: Commercial, Retail, Wealth and Other. Banking services are provided by the Company's national banking subsidiary, FirstMerit Bank. The Bank's trust department offers wealth management and trust services. The majority of its customers are comprised of consumers and small and medium sized businesses. The Bank has a small international department to service clients in its markets. The Company competes with other local, regional and national providers of financial services such as other bank holding companies, commercial banks, savings associations, credit unions, consumer and commercial finance companies, equipment leasing companies, mortgage banking companies, investment brokers and other brokerage institutions, money market and mutual funds and insurance companies. The Company is subject to extensive regulation, examination and supervision under by federal and state law.
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