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.
Southwest Gas Holdings's Sloan Ratio for the quarter that ended in Dec. 2023 was -4.29%.
As of Dec. 2023, Southwest Gas Holdings has a Sloan Ratio of -4.29%, indicating the company is in the safe zone and there is no funny business with accruals.
Southwest Gas Holdings Sloan Ratio % Historical Data
* 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 Southwest Gas Holdings's Sloan Ratio %
For the Utilities - Regulated Gas subindustry, Southwest Gas Holdings'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.
Southwest Gas Holdings's Sloan Ratio % Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Southwest Gas Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Southwest Gas Holdings's Sloan Ratio % falls into.
Southwest Gas Holdings 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.
Southwest Gas Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Southwest Gas Holdings's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 45.911 (Mar. 2023 ) + 28.878 (Jun. 2023 ) + 3.231 (Sep. 2023 ) + 72.869 (Dec. 2023 ) = $151 Mil.
Southwest Gas Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -185.742 (Mar. 2023 ) + 197.928 (Jun. 2023 ) + 186.248 (Sep. 2023 ) + 310.777 (Dec. 2023 ) = $509 Mil.
Southwest Gas Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 835.665 (Mar. 2023 ) + -228.232 (Jun. 2023 ) + -250.367 (Sep. 2023 ) + -206.1 (Dec. 2023 ) = $151 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.
Southwest Gas Holdings (NYSE:SWX) 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, Southwest Gas Holdings has a Sloan Ratio of -4.29%, indicating the company is in the safe zone and there is no funny business with accruals.
Southwest Gas Holdings Sloan Ratio % Related Terms
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Southwest Gas Holdings (Southwest Gas Holdings) Business Description
Southwest Gas Holdings Inc is a utility company primarily engaged in the purchasing, distributing, and transporting of natural gas in the American Southwest. The company segments its activities into natural gas operations and Utility Infrastructure Services units. The first of these encompasses the company's core natural gas business as one of the largest distributors in the states of Arizona and Nevada. The natural gas operations division is responsible for roughly half of Southwest Gas' total revenue through the sale of natural gas to mainly residential and small commercial customers. The Utility Infrastructure Services segment generates the other half of the company's total revenue from the underground piping contractor services that its subsidiary, Centuri Construction Group, provides.
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