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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.
As of Dec. 2025, British American Tobacco has a Sloan Ratio of 0.03%, indicating the company is in the safe zone and there is no funny business with accruals.
British American Tobacco (CHIX:BATSl) 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 Dec. 2025, British American Tobacco has a Sloan Ratio of 0.03%, indicating the company is in the safe zone and there is no funny business with accruals.
British American Tobacco Sloan Ratio % Related Terms
British American Tobacco Sloan Ratio % Historical Data
* 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.
CHIX:BATSL vs PM, MO, TPB: Sloan Ratio % Comparison
For the Tobacco subindustry, British American Tobacco'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.
British American Tobacco Sloan Ratio % vs Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, British American Tobacco's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where British American Tobacco's Sloan Ratio % falls into.
British American Tobacco 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.
British American Tobacco's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
British American Tobacco's Net Income for the trailing twelve months (TTM) ended in Dec. 2025 was 4512 (Jun. 2025 ) + 3252 (Dec. 2025 ) = £7,764 Mil.
British American Tobacco's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2025 was 2309 (Jun. 2025 ) + 4033 (Dec. 2025 ) = £6,342 Mil.
British American Tobacco's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2025 was 1012 (Jun. 2025 ) + 375 (Dec. 2025 ) = £1,387 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.
British American Tobacco (CHIX:BATSL) has a Sloan Ratio % of 0.03% as of Dec. 2025. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on British American Tobacco and its competitors.
Is British American Tobacco's Sloan Ratio % too high?
British American Tobacco's current Sloan Ratio % is 0.03%. Overall, British American Tobacco has a GF Score™ of 71/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does British American Tobacco's Sloan Ratio % compare to PM and MO?
British American Tobacco's Sloan Ratio % of 0.03% can be compared against companies in the Tobacco Products industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Tobacco Products company?
A good Sloan Ratio % depends on the Tobacco Products industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on British American Tobacco and its competitors. British American Tobacco's current Sloan Ratio % is 0.03%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is British American Tobacco stock overvalued right now?
Based on GuruFocus' analysis, British American Tobacco (CHIX:BATSL) is currently considered Significantly Overvalued. The stock's GF Value™ is £27.91, compared to a current price of £46.59 — trading 66.9% above its estimated fair value. The current Sloan Ratio % is 0.03%. British American Tobacco's overall GF Score™ is 71/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For British American Tobacco (CHIX:BATSL), the current Sloan Ratio % is 0.03% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is British American Tobacco (CHIX:BATSL) Overvalued in 2026?
Based on GuruFocus' analysis, British American Tobacco stock appears to be overvalued.
The current stock price of £46.59 is trading 66.9% above its estimated GF Value™ of £27.91.
GuruFocus considers British American Tobacco to be Significantly Overvalued.
Key valuation signals for CHIX:BATSL:
Sloan Ratio %: 0.03%
GF Value™: £27.91 vs. price of £46.59 (66.9% above fair value)
No single metric tells the full story. See the CHIX:BATSL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The third-largest tobacco company by volume, British American Tobacco sold 465 billion cigarettes in 2025. Its leading brands are Dunhill, Kent, Pall Mall, Lucky Strike, and Rothmans in cigarettes. Its ownership of the Camel, Natural American Spirit, and Newport brands are limited to the US. In next-generation products, the company has the Vuse brand in vaping, Glo in heated tobacco, and Velo in modern oral tobacco. The company also owns a 22.9% stake in ITC limited, the largest Indian cigarette company.
71GF Score
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Sloan Ratio % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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