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.
Rockwell Automation's Sloan Ratio for the quarter that ended in Dec. 2023 was -2.53%.
As of Dec. 2023, Rockwell Automation has a Sloan Ratio of -2.53%, indicating the company is in the safe zone and there is no funny business with accruals.
Rockwell Automation Sloan Ratio % Historical Data
The historical data trend for Rockwell Automation'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 Rockwell Automation's Sloan Ratio %
For the Specialty Industrial Machinery subindustry, Rockwell Automation'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.
Rockwell Automation's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Rockwell Automation's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Rockwell Automation's Sloan Ratio % falls into.
Rockwell Automation 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.
Rockwell Automation's Sloan Ratio for the fiscal year that ended in Sep. 2023 is calculated as
Rockwell Automation's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 300.3 (Mar. 2023 ) + 400.2 (Jun. 2023 ) + 193.5 (Sep. 2023 ) + 215.2 (Dec. 2023 ) = $1,109 Mil.
Rockwell Automation's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 187.1 (Mar. 2023 ) + 281.7 (Jun. 2023 ) + 839.5 (Sep. 2023 ) + 32.6 (Dec. 2023 ) = $1,341 Mil.
Rockwell Automation's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -1.2 (Mar. 2023 ) + 108.1 (Jun. 2023 ) + 765.7 (Sep. 2023 ) + -817.4 (Dec. 2023 ) = $55 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.
Rockwell Automation (NYSE:ROK) 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, Rockwell Automation has a Sloan Ratio of -2.53%, indicating the company is in the safe zone and there is no funny business with accruals.
Rockwell Automation Sloan Ratio % Related Terms
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Rockwell Automation (Rockwell Automation) Business Description
Rockwell Automation is a pure-play automation competitor that is the successor entity to Rockwell International, which spun off its former Rockwell Collins avionics segment in 2001. As of fiscal 2021, the firm operates through three segments--intelligent devices, software and control, and lifecycle services. Intelligent devices contains its drives, sensors, and industrial components, software and control contains its information and network and security software, while lifecycle services contains its consulting and maintenance services as well as its Sensia JV with SLB.
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