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.
TRC's Sloan Ratio for the quarter that ended in Mar. 2017 was -0.28%.
As of Mar. 2017, TRC has a Sloan Ratio of -0.28%, indicating the company is in the safe zone and there is no funny business with accruals.
TRC Sloan Ratio % Historical Data
The historical data trend for TRC'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.
For the Engineering & Construction subindustry, TRC'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.
TRC's Sloan Ratio % Distribution in the Construction Industry
For the Construction industry and Industrials sector, TRC's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where TRC's Sloan Ratio % falls into.
TRC 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.
TRC's Sloan Ratio for the fiscal year that ended in Jun. 2016 is calculated as
TRC's Net Income for the trailing twelve months (TTM) ended in Mar. 2017 was 5.909 (Jun. 2016 ) + 3.639 (Sep. 2016 ) + 3.998 (Dec. 2016 ) + 4.498 (Mar. 2017 ) = $18.0 Mil.
TRC's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2017 was 17.665 (Jun. 2016 ) + -3.186 (Sep. 2016 ) + 21.403 (Dec. 2016 ) + 7.074 (Mar. 2017 ) = $43.0 Mil.
TRC's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2017 was -1.469 (Jun. 2016 ) + -0.99 (Sep. 2016 ) + -0.861 (Dec. 2016 ) + -20.126 (Mar. 2017 ) = $-23.4 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.
TRC (NYSE:TRR) 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. 2017, TRC has a Sloan Ratio of -0.28%, indicating the company is in the safe zone and there is no funny business with accruals.
TRC Sloan Ratio % Related Terms
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TRC Companies Inc was incorporated in 1969. The Company is a national engineering, consulting and construction management firm that provides integrated services to the environmental, energy, and infrastructure markets in the United States. A range of commercial and governmental clients depend on it to design solutions to their toughest business challenges. Its multidisciplinary project teams help its clients implement complex projects from initial concept to delivery and commissioning, maintain and operate their facilities in compliance with regulatory standards and manage their assets through decommissioning, demolition, restoration and disposition. The Company's business segments are Energy, Environmental, and Infrastructure. The Energy segment is strategically positioned to serve key areas within the energy market which is currently investing in modernization, expansion, enhancement and replacement of outdated facilities. The Environmental segment provides services to its clients including air quality modeling, air emissions testing and monitoring, cultural and natural resource management, permitting of energy facilities and remediation of contaminated sites. The Infrastructure segment offers a variety of services to its infrastructure clients mainly related to: rehabilitation of overburdened and deteriorating infrastructure systems; design, construction engineering inspection and construction management associated with new infrastructure projects; and management of risks related to security of public and private facilities. It competes with both the large international firms and the small niche or geographically focused firms. The Company's business is subjected to various rules and regulations at the federal, state and local government levels.
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