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.
CMC Materials's Sloan Ratio for the quarter that ended in Mar. 2022 was 1.06%.
As of Mar. 2022, CMC Materials has a Sloan Ratio of 1.06%, indicating the company is in the safe zone and there is no funny business with accruals.
CMC Materials Sloan Ratio % Historical Data
The historical data trend for CMC Materials'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 CMC Materials's Sloan Ratio %
For the Semiconductor Equipment & Materials subindustry, CMC Materials'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.
CMC Materials's Sloan Ratio % Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, CMC Materials's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where CMC Materials's Sloan Ratio % falls into.
CMC Materials 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.
CMC Materials's Sloan Ratio for the fiscal year that ended in Sep. 2021 is calculated as
CMC Materials's Net Income for the trailing twelve months (TTM) ended in Mar. 2022 was 33.642 (Jun. 2021 ) + 16.059 (Sep. 2021 ) + 27.428 (Dec. 2021 ) + 34.571 (Mar. 2022 ) = $112 Mil.
CMC Materials's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2022 was 56.285 (Jun. 2021 ) + 90.82 (Sep. 2021 ) + 45.232 (Dec. 2021 ) + 64.975 (Mar. 2022 ) = $257 Mil.
CMC Materials's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2022 was -134.334 (Jun. 2021 ) + -11.27 (Sep. 2021 ) + -13.188 (Dec. 2021 ) + -10.112 (Mar. 2022 ) = $-169 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.
CMC Materials (NAS:CCMP) 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. 2022, CMC Materials has a Sloan Ratio of 1.06%, indicating the company is in the safe zone and there is no funny business with accruals.
CMC Materials Sloan Ratio % Related Terms
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CMC Materials (CMC Materials) Business Description
CMC Materials Inc is a supplier of polishing slurries and polishing pads used in the manufacturing of advanced integrated circuit devices within the semiconductor industry. The company's products assist in the production of advanced IC devices, by helping customers produce smaller, faster, and more complex IC devices with fewer defects. CMC's products are predominately geared towards the process of flattening layers of materials that are deposited upon silicon wafers in the production of ICs. Slightly less than half of the company's revenue is derived from foundry customers that provide contract manufacturing services for producers of logic devices.
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