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.
Kansas City Southern's Sloan Ratio for the quarter that ended in Sep. 2021 was -4.49%.
As of Sep. 2021, Kansas City Southern has a Sloan Ratio of -4.49%, indicating the company is in the safe zone and there is no funny business with accruals.
Kansas City Southern Sloan Ratio % Historical Data
The historical data trend for Kansas City Southern'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 Kansas City Southern's Sloan Ratio %
For the Railroads subindustry, Kansas City Southern'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.
Kansas City Southern's Sloan Ratio % Distribution in the Transportation Industry
For the Transportation industry and Industrials sector, Kansas City Southern's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Kansas City Southern's Sloan Ratio % falls into.
Kansas City Southern 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.
Kansas City Southern's Sloan Ratio for the fiscal year that ended in Dec. 2020 is calculated as
Kansas City Southern's Net Income for the trailing twelve months (TTM) ended in Sep. 2021 was 165.7 (Dec. 2020 ) + 153 (Mar. 2021 ) + -378.5 (Jun. 2021 ) + 156.2 (Sep. 2021 ) = $96 Mil.
Kansas City Southern's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2021 was 260.1 (Dec. 2020 ) + 226.2 (Mar. 2021 ) + 281.1 (Jun. 2021 ) + 322.8 (Sep. 2021 ) = $1,090 Mil.
Kansas City Southern's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2021 was -112.8 (Dec. 2020 ) + -114 (Mar. 2021 ) + -165 (Jun. 2021 ) + -128.3 (Sep. 2021 ) = $-520 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.
Kansas City Southern (NYSE:KSU) 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. 2021, Kansas City Southern has a Sloan Ratio of -4.49%, indicating the company is in the safe zone and there is no funny business with accruals.
Kansas City Southern Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Kansas City Southern's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Kansas City Southern (Kansas City Southern) Business Description
Kansas City Southern, the smallest Class I railroad, derives about half of its $2.6 billion revenue on 3,400 miles of track in the Central and Southern United States. Remaining sales are produced by operating concessions on 3,300 miles of rail in Mexico and 47 miles of track adjacent to the Panama Canal. KCS' freight includes industrial and forest products (around 21% of total revenue), chemicals and petroleum (26%), agriculture and minerals (18%), intermodal (13%), energy (9%), and autos (9%); other revenue stems from switching, demurrage, and the like.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
KSU has been successfully added to your 