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.
Forge Group's Sloan Ratio for the quarter that ended in Jun. 2013 was 0.52%.
As of Jun. 2013, Forge Group has a Sloan Ratio of 0.52%, indicating the company is in the safe zone and there is no funny business with accruals.
Forge Group Sloan Ratio % Historical Data
The historical data trend for Forge Group'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 Forge Group's Sloan Ratio %
For the Engineering & Construction subindustry, Forge Group'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.
Forge Group's Sloan Ratio % Distribution in the Construction Industry
For the Construction industry and Industrials sector, Forge Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Forge Group's Sloan Ratio % falls into.
Forge Group 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.
Forge Group's Sloan Ratio for the fiscal year that ended in Jun. 2013 is calculated as
For company reported annually, GuruFocus uses latest annual data as the TTM data.
Forge Group's Net Income for the trailing twelve months (TTM) ended in Jun. 2013 was A$63 Mil.
Forge Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2013 was A$18 Mil.
Forge Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2013 was A$43 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.
Forge Group (ASX:FGE) 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 Jun. 2013, Forge Group has a Sloan Ratio of 0.52%, indicating the company is in the safe zone and there is no funny business with accruals.
Forge Group Sloan Ratio % Related Terms
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Forge Group Ltd provides construction, commercial building, engineering, maintenance and workshop fabrication services. Its operations are segmented into four areas - Minerals & Resources, Power, Construction and Asset Management. The Minerals & Resources segment provides a wide range of engineering, design and construction services for the mining and metals sector. The Power segment provides turnkey power generation solutions to the energy and utilities sectors. The Construction segment offers a suite of construction services that covers all disciplines including heavy civil, structural, mechanical, piping, tanks, electrical, instrumentation, and building. Further, the Asset Management segment offers various asset management services. The Company has operational footprints across Australia, North America, Africa and Asia.
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