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.
NextEra Energy's Sloan Ratio for the quarter that ended in Mar. 2024 was 10.98%.
As of Mar. 2024, NextEra Energy has a Sloan Ratio of 10.98%, indicating there is a warning stage of accrual build up.
NextEra Energy Sloan Ratio % Historical Data
The historical data trend for NextEra Energy'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 NextEra Energy's Sloan Ratio %
For the Utilities - Regulated Electric subindustry, NextEra Energy'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.
NextEra Energy's Sloan Ratio % Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, NextEra Energy's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where NextEra Energy's Sloan Ratio % falls into.
NextEra Energy 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.
NextEra Energy's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
NextEra Energy's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 2795 (Jun. 2023 ) + 1219 (Sep. 2023 ) + 1210 (Dec. 2023 ) + 2268 (Mar. 2024 ) = $7,492 Mil.
NextEra Energy's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 3086 (Jun. 2023 ) + 3664 (Sep. 2023 ) + 2878 (Dec. 2023 ) + 3077 (Mar. 2024 ) = $12,705 Mil.
NextEra Energy's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -4997 (Jun. 2023 ) + -5963 (Sep. 2023 ) + -4690 (Dec. 2023 ) + -9321 (Mar. 2024 ) = $-24,971 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.
NextEra Energy (NYSE:NEE) 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 Mar. 2024, NextEra Energy has a Sloan Ratio of 10.98%, indicating there is a warning stage of accrual build up.
NextEra Energy Sloan Ratio % Related Terms
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NextEra Energy (NextEra Energy) Business Description
NextEra Energy's regulated utility, Florida Power & Light, is the largest rate-regulated utility in Florida. The utility distributes power to nearly 6 million customer accounts in Florida and owns 32 gigawatts of generation. FP&L contributes roughly 70% of NextEra's consolidated operating earnings. NextEra Energy Resources, the renewable energy segment, generates and sells power throughout the United States and Canada with more than 25 GW of generation capacity, including natural gas, nuclear, wind, and solar.
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