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.
The Hershey Co's Sloan Ratio for the quarter that ended in Dec. 2023 was 6.19%.
As of Dec. 2023, The Hershey Co has a Sloan Ratio of 6.19%, indicating the company is in the safe zone and there is no funny business with accruals.
The Hershey Co Sloan Ratio % Historical Data
The historical data trend for The Hershey Co'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.
For the Confectioners subindustry, The Hershey Co'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.
The Hershey Co Sloan Ratio % Distribution
For the Consumer Packaged Goods industry and Consumer Defensive sector, The Hershey Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where The Hershey Co's Sloan Ratio % falls into.
The Hershey Co 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.
The Hershey Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
The Hershey Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 587.185 (Mar. 2023 ) + 406.983 (Jun. 2023 ) + 518.577 (Sep. 2023 ) + 349.042 (Dec. 2023 ) = $1,862 Mil.
The Hershey Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 755.397 (Mar. 2023 ) + 294.411 (Jun. 2023 ) + 515.733 (Sep. 2023 ) + 757.649 (Dec. 2023 ) = $2,323 Mil.
The Hershey Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -188.317 (Mar. 2023 ) + -327.712 (Jun. 2023 ) + -219.514 (Sep. 2023 ) + -463.133 (Dec. 2023 ) = $-1,199 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.
The Hershey Co (NYSE:HSY) 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 Dec. 2023, The Hershey Co has a Sloan Ratio of 6.19%, indicating the company is in the safe zone and there is no funny business with accruals.
The Hershey Co Sloan Ratio % Related Terms
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The Hershey Co (The Hershey Co) Business Description
Hershey is a leading confectionery manufacturer in the U.S. (around a $25 billion market), controlling around 45% of the domestic chocolate space (per IRI, as cited by Hershey). Beyond its namesake label, the firm's mix has expanded over the last 85 years and now consists of 100 brands, including Reese's, Kit Kat, Kisses, and Ice Breakers. Hershey's products are sold in about 80 countries, albeit with just a high-single-digit percentage of sales coming from markets outside the U.S., including Brazil, India, and Mexico. The firm has sought inorganic opportunities to extend its reach beyond its core confection business, adding Amplify Snack Brands and its Skinny Pop ready-to-eat popcorn to its mix, Pirate Brands, and Dot's Pretzels over the past few years.
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