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.
* 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 Alpha Dhabi Holding PJSC's Sloan Ratio %
For the Conglomerates subindustry, Alpha Dhabi Holding PJSC'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.
Alpha Dhabi Holding PJSC's Sloan Ratio % Distribution in the Conglomerates Industry
For the Conglomerates industry and Industrials sector, Alpha Dhabi Holding PJSC's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Alpha Dhabi Holding PJSC's Sloan Ratio % falls into.
Alpha Dhabi Holding PJSC 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.
Alpha Dhabi Holding PJSC's Sloan Ratio for the fiscal year that ended in Dec. 2022 is calculated as
Alpha Dhabi Holding PJSC's Net Income for the trailing twelve months (TTM) ended in Sep. 2023 was 544.119 (Dec. 2022 ) + 6579.472 (Mar. 2023 ) + 2302.048 (Jun. 2023 ) + 877.667 (Sep. 2023 ) = د.إ10,303 Mil.
Alpha Dhabi Holding PJSC's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2023 was 7568.495 (Dec. 2022 ) + -2823.217 (Mar. 2023 ) + 2499.603 (Jun. 2023 ) + 3758.1 (Sep. 2023 ) = د.إ11,003 Mil.
Alpha Dhabi Holding PJSC's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2023 was -2827.59 (Dec. 2022 ) + -3412.645 (Mar. 2023 ) + -3690.166 (Jun. 2023 ) + -4278.438 (Sep. 2023 ) = د.إ-14,209 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.
Alpha Dhabi Holding PJSC (ADX:ALPHADHABI) 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 Sep. 2023, Alpha Dhabi Holding PJSC has a Sloan Ratio of 10.12%, indicating there is a warning stage of accrual build up.
Alpha Dhabi Holding PJSC Sloan Ratio % Related Terms
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Alpha Dhabi Holding PJSC (ADX:ALPHADHABI) Business Description
Alpha Dhabi Holding PJSC is an investment holding company in the UAE. It invests in five major verticals namely industrials, which relates to the providing of dredging and associated land reclamation works; healthcare, which includes hospital and medical laboratory management services and laboratory diagnostic services; Construction segment provides contracting services relating to saleable and residential buildings, infrastructure development and civil construction works; Real estate, which includes rental income from properties and income from investment in real estate companies or sale of real estate; and Services, which comprise management services, hospitality income as well as a variety of smaller ancillary activities. It generates the majority of its revenue from the UAE.
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