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.
Applied Materials's Sloan Ratio for the quarter that ended in Oct. 2024 was 2.42%.
As of Oct. 2024, Applied Materials has a Sloan Ratio of 2.42%, indicating the company is in the safe zone and there is no funny business with accruals.
Applied Materials Sloan Ratio % Historical Data
The historical data trend for Applied 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 Applied Materials's Sloan Ratio %
For the Semiconductor Equipment & Materials subindustry, Applied 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.
Applied Materials's Sloan Ratio % Distribution in the Semiconductors Industry
For the Semiconductors industry and Technology sector, Applied Materials's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Applied Materials's Sloan Ratio % falls into.
Applied 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.
Applied Materials's Sloan Ratio for the fiscal year that ended in Oct. 2024 is calculated as
Applied Materials's Net Income for the trailing twelve months (TTM) ended in Oct. 2024 was 1853.442 (Jan. 2024 ) + 1604.904 (Apr. 2024 ) + 1572.01 (Jul. 2024 ) + 1589.058 (Oct. 2024 ) = €6,619 Mil.
Applied Materials's Cash Flow from Operations for the trailing twelve months (TTM) ended in Oct. 2024 was 2134.35 (Jan. 2024 ) + 1297.344 (Apr. 2024 ) + 2198.97 (Jul. 2024 ) + 2363.85 (Oct. 2024 ) = €7,995 Mil.
Applied Materials's Cash Flow from Investing for the trailing twelve months (TTM) ended in Oct. 2024 was -410.346 (Jan. 2024 ) + -138.868 (Apr. 2024 ) + -608.52 (Jul. 2024 ) + -983.178 (Oct. 2024 ) = €-2,141 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.
Applied Materials (CHIX:AP2d) 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 Oct. 2024, Applied Materials has a Sloan Ratio of 2.42%, indicating the company is in the safe zone and there is no funny business with accruals.
Applied Materials Sloan Ratio % Related Terms
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Applied Materials is the largest semiconductor wafer fabrication equipment, or WFE, manufacturer in the world. Applied Materials has a broad portfolio spanning nearly every corner of the WFE ecosystem. Specifically, Applied Materials holds a market share leadership position in deposition, which entails the layering of new materials on semiconductor wafers. It is more exposed to general-purpose logic chips made at integrated device manufacturers and foundries. It counts the largest chipmakers in the world as customers, including TSMC, Intel, and Samsung.
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