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.
Methode Electronics's Sloan Ratio for the quarter that ended in Jan. 2024 was 2.37%.
As of Jan. 2024, Methode Electronics has a Sloan Ratio of 2.37%, indicating the company is in the safe zone and there is no funny business with accruals.
Methode Electronics Sloan Ratio % Historical Data
The historical data trend for Methode Electronics'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 Methode Electronics's Sloan Ratio %
For the Electronic Components subindustry, Methode Electronics'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.
Methode Electronics's Sloan Ratio % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Methode Electronics's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Methode Electronics's Sloan Ratio % falls into.
Methode Electronics 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.
Methode Electronics's Sloan Ratio for the fiscal year that ended in Apr. 2023 is calculated as
Methode Electronics's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was 8.1 (Apr. 2023 ) + 0.9 (Jul. 2023 ) + -55.3 (Oct. 2023 ) + -11.6 (Jan. 2024 ) = $-58 Mil.
Methode Electronics's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 49 (Apr. 2023 ) + -5.6 (Jul. 2023 ) + -0.6 (Oct. 2023 ) + 28.8 (Jan. 2024 ) = $72 Mil.
Methode Electronics's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was -125.8 (Apr. 2023 ) + -13.8 (Jul. 2023 ) + -8.5 (Oct. 2023 ) + -16.7 (Jan. 2024 ) = $-165 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.
Methode Electronics (NYSE:MEI) 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 Jan. 2024, Methode Electronics has a Sloan Ratio of 2.37%, indicating the company is in the safe zone and there is no funny business with accruals.
Methode Electronics Sloan Ratio % Related Terms
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Methode Electronics (Methode Electronics) Business Description
Methode Electronics Inc makes component and subsystem devices employing electrical, radio remote control, electronic, wireless, and sensing technologies. The firm is organized in various business segments: Automotive, Industrial, interface and Medical. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile. The Industrial segment manufactures external lighting solutions, industrial safety radio remote controls, braided flexible cables and custom power-product assemblies. The Interface segment provides a variety of copper and fiber-optic interface and interface solutions. The Medical segment is made up of the Company's medical device business, Dabir Surfaces, its surface support technology aimed at pressure injury prevention.
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