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.
Marathon Petroleum's Sloan Ratio for the quarter that ended in Dec. 2023 was -1.56%.
As of Dec. 2023, Marathon Petroleum has a Sloan Ratio of -1.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Marathon Petroleum Sloan Ratio % Historical Data
The historical data trend for Marathon Petroleum'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 Marathon Petroleum's Sloan Ratio %
For the Oil & Gas Refining & Marketing subindustry, Marathon Petroleum'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.
Marathon Petroleum's Sloan Ratio % Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Marathon Petroleum's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Marathon Petroleum's Sloan Ratio % falls into.
Marathon Petroleum 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.
Marathon Petroleum's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Marathon Petroleum's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 2724 (Mar. 2023 ) + 2226 (Jun. 2023 ) + 3280 (Sep. 2023 ) + 1451 (Dec. 2023 ) = $9,681 Mil.
Marathon Petroleum's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 4057 (Mar. 2023 ) + 3984 (Jun. 2023 ) + 4953 (Sep. 2023 ) + 1123 (Dec. 2023 ) = $14,117 Mil.
Marathon Petroleum's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -816 (Mar. 2023 ) + -880 (Jun. 2023 ) + -435 (Sep. 2023 ) + -964 (Dec. 2023 ) = $-3,095 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.
Marathon Petroleum (NYSE:MPC) 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, Marathon Petroleum has a Sloan Ratio of -1.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Marathon Petroleum Sloan Ratio % Related Terms
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Marathon Petroleum (Marathon Petroleum) Business Description
Marathon Petroleum is an independent refiner with 13 refineries in the midcontinent, West Coast, and Gulf Coast of the United States with total throughput capacity of 2.9 million barrels per day. Its Dickinson, North Dakota, facility produces 184 million gallons a year of renewable diesel. Its Martinez, California, facility will have the ability to produce 730 million gallons a year of renewable diesel once converted. The firm also owns and operates midstream assets primarily through its listed master limited partnership, MPLX.
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