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.
Advance Auto Parts's Sloan Ratio for the quarter that ended in Sep. 2024 was 0.00%.
As of Sep. 2024, Advance Auto Parts has a Sloan Ratio of 0.00%, indicating the company is in the safe zone and there is no funny business with accruals.
Advance Auto Parts Sloan Ratio % Historical Data
The historical data trend for Advance Auto Parts'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 Advance Auto Parts's Sloan Ratio %
For the Specialty Retail subindustry, Advance Auto Parts'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.
Advance Auto Parts's Sloan Ratio % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Advance Auto Parts's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Advance Auto Parts's Sloan Ratio % falls into.
Advance Auto Parts 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.
Advance Auto Parts's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Advance Auto Parts's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was -12680.847 (Dec. 2023 ) + 33710.111 (Mar. 2024 ) + 40289.44 (Jun. 2024 ) + -5716.307 (Sep. 2024 ) = ARS55,602 Mil.
Advance Auto Parts's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 93333.301 (Dec. 2023 ) + 2264.64 (Mar. 2024 ) + 76230.332 (Jun. 2024 ) + 66650.958 (Sep. 2024 ) = ARS238,479 Mil.
Advance Auto Parts's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -18154.329 (Dec. 2023 ) + -32797.683 (Mar. 2024 ) + -36443.267 (Jun. 2024 ) + -42625.171 (Sep. 2024 ) = ARS-130,020 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.
Advance Auto Parts (BUE:AAP) 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, Advance Auto Parts has a Sloan Ratio of 0.00%, indicating the company is in the safe zone and there is no funny business with accruals.
Advance Auto Parts Sloan Ratio % Related Terms
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Advance Auto Parts is a leading auto parts retailer in North America with more than 4,000 store and branch locations. About 55% of the firm's sales are geared toward the professional channel, with the remaining 45% going to the do-it-yourself market. Through its vast store footprint and distribution network, Advance manages thousands of stock-keeping units conducive to various vehicle makes and models. The retailer primarily competes on the basis of inventory availability and service speed, making the operating efficiency of its hub and spoke distribution model critical to meeting customer needs.
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