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.
Alto Ingredients's Sloan Ratio for the quarter that ended in Sep. 2024 was -8.91%.
As of Sep. 2024, Alto Ingredients has a Sloan Ratio of -8.91%, indicating the company is in the safe zone and there is no funny business with accruals.
Alto Ingredients Sloan Ratio % Historical Data
The historical data trend for Alto Ingredients'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 Alto Ingredients's Sloan Ratio %
For the Specialty Chemicals subindustry, Alto Ingredients'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.
Alto Ingredients's Sloan Ratio % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, Alto Ingredients's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Alto Ingredients's Sloan Ratio % falls into.
Alto Ingredients 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.
Alto Ingredients's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Alto Ingredients's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was -18.945 (Dec. 2023 ) + -11.725 (Mar. 2024 ) + -3.106 (Jun. 2024 ) + -2.441 (Sep. 2024 ) = $-36 Mil.
Alto Ingredients's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 11.796 (Dec. 2023 ) + 1.429 (Mar. 2024 ) + -13.728 (Jun. 2024 ) + 18.568 (Sep. 2024 ) = $18 Mil.
Alto Ingredients's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -4.92 (Dec. 2023 ) + -6.043 (Mar. 2024 ) + -6.054 (Jun. 2024 ) + -0.091 (Sep. 2024 ) = $-17 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.
Alto Ingredients (NAS:ALTO) 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. 2024, Alto Ingredients has a Sloan Ratio of -8.91%, indicating the company is in the safe zone and there is no funny business with accruals.
Alto Ingredients Sloan Ratio % Related Terms
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Alto Ingredients Inc is a producer of specialty alcohols and essential ingredients. The company serves five markets: Health, Home and Beauty, Food and Beverage, Essential Ingredients, and Renewable Fuels. Its customers include major food and beverage companies and consumer products manufacturers and distributors. The company operates under three segments: Marketing and distribution, Pekin Campus production, and Other production. The Marketing and distribution segment participates in marketing and merchant trading for alcohols and essential ingredients; Pekin Campus produces and sells products produced at the company's Pekin, Illinois, campus, and about half of the firm's revenue flows from this segment. Other production makes and sells from the company's other production facilities.
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