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.
Boston Beer Co's Sloan Ratio for the quarter that ended in Dec. 2023 was -8.85%.
As of Dec. 2023, Boston Beer Co has a Sloan Ratio of -8.85%, indicating the company is in the safe zone and there is no funny business with accruals.
Boston Beer Co Sloan Ratio % Historical Data
The historical data trend for Boston Beer Co'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 Boston Beer Co's Sloan Ratio %
For the Beverages - Brewers subindustry, Boston Beer Co'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.
Boston Beer Co's Sloan Ratio % Distribution in the Beverages - Alcoholic Industry
For the Beverages - Alcoholic industry and Consumer Defensive sector, Boston Beer Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Boston Beer Co's Sloan Ratio % falls into.
Boston Beer Co 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.
Boston Beer Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Boston Beer Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -8.956 (Mar. 2023 ) + 58.035 (Jun. 2023 ) + 45.295 (Sep. 2023 ) + -18.124 (Dec. 2023 ) = $76 Mil.
Boston Beer Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -17.822 (Mar. 2023 ) + 118.959 (Jun. 2023 ) + 131.264 (Sep. 2023 ) + 32.75 (Dec. 2023 ) = $265 Mil.
Boston Beer Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -17.117 (Mar. 2023 ) + -17.497 (Jun. 2023 ) + -12.455 (Sep. 2023 ) + -15.309 (Dec. 2023 ) = $-62 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.
Boston Beer Co (NYSE:SAM) 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, Boston Beer Co has a Sloan Ratio of -8.85%, indicating the company is in the safe zone and there is no funny business with accruals.
Boston Beer Co Sloan Ratio % Related Terms
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Boston Beer Co (Boston Beer Co) Business Description
Boston Beer is a top player in high-end malt beverages and adjacent categories in the U.S., with strong positions in craft beer, flavored malt beverage, hard cider, and hard seltzer. The bulk of volume and revenue is concentrated in four brands, including Samuel Adams, Angry Orchard, Twisted Tea, and Truly Hard Seltzer. Beverages are produced using a hybrid model leveraging both in-house capacities and third-party breweries through contract arrangements. While the firm is required to use distributors to reach end markets including retailers and on-premises operators, it also employs 500 internal sales representatives to educate the market about its products. The firm generates over 95% of sales in the U.S.
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