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.
Toll Brothers's Sloan Ratio for the quarter that ended in Jan. 2024 was 1.94%.
As of Jan. 2024, Toll Brothers has a Sloan Ratio of 1.94%, indicating the company is in the safe zone and there is no funny business with accruals.
Toll Brothers Sloan Ratio % Historical Data
The historical data trend for Toll Brothers'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 Toll Brothers's Sloan Ratio %
For the Residential Construction subindustry, Toll Brothers'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.
Toll Brothers's Sloan Ratio % Distribution in the Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, Toll Brothers's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Toll Brothers's Sloan Ratio % falls into.
Toll Brothers 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.
Toll Brothers's Sloan Ratio for the fiscal year that ended in Oct. 2023 is calculated as
Toll Brothers's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was 320.216 (Apr. 2023 ) + 414.789 (Jul. 2023 ) + 445.536 (Oct. 2023 ) + 239.558 (Jan. 2024 ) = $1,420 Mil.
Toll Brothers's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 503.335 (Apr. 2023 ) + 529.462 (Jul. 2023 ) + 591.397 (Oct. 2023 ) + -306.982 (Jan. 2024 ) = $1,317 Mil.
Toll Brothers's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was -29.779 (Apr. 2023 ) + -34.469 (Jul. 2023 ) + -16.972 (Oct. 2023 ) + -59.364 (Jan. 2024 ) = $-141 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.
Toll Brothers (NYSE:TOL) 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 Jan. 2024, Toll Brothers has a Sloan Ratio of 1.94%, indicating the company is in the safe zone and there is no funny business with accruals.
Toll Brothers Sloan Ratio % Related Terms
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Toll Brothers (Toll Brothers) Business Description
Toll Brothers is the leading luxury homebuilder in the United States with an average sale price well above public competitors'. The company operates in over 60 markets across 24 states and caters to move-up, active-adult, and second-home buyers. Traditional homebuilding operations represent most of company's revenue. Toll Brothers also builds luxury for-sale and for-rent properties in urban centers across the U.S. It has its headquarters in Horsham, Pennsylvania.
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