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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.
Clearford Water Systems (OTCPK:CLIRF) 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. 2021, Clearford Water Systems has a Sloan Ratio of -11.52%, indicating there is a warning stage of accrual build up.
Clearford Water Systems Sloan Ratio % Related Terms
Clearford Water Systems 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.
For the Waste Management subindustry, Clearford Water Systems'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.
Clearford Water Systems Sloan Ratio % vs Waste Management Industry
For the Waste Management industry and Industrials sector, Clearford Water Systems's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Clearford Water Systems's Sloan Ratio % falls into.
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.
Clearford Water Systems's Sloan Ratio for the fiscal year that ended in Dec. 2020 is calculated as
Clearford Water Systems's Net Income for the trailing twelve months (TTM) ended in Sep. 2021 was -1.129 (Dec. 2020 ) + -1.646 (Mar. 2021 ) + -1.434 (Jun. 2021 ) + -3.147 (Sep. 2021 ) = $-7.36 Mil.
Clearford Water Systems's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2021 was -1.103 (Dec. 2020 ) + 0.707 (Mar. 2021 ) + -2.61 (Jun. 2021 ) + -2.157 (Sep. 2021 ) = $-5.16 Mil.
Clearford Water Systems's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2021 was -0.206 (Dec. 2020 ) + -0.051 (Mar. 2021 ) + -0.069 (Jun. 2021 ) + -0.062 (Sep. 2021 ) = $-0.39 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.
Clearford Water Systems (CLIRF) has a Sloan Ratio % of -11.52% as of Sep. 2021. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Clearford Water Systems and its competitors.
Is Clearford Water Systems' Sloan Ratio % too high?
Clearford Water Systems' current Sloan Ratio % is -11.52%.
How does Clearford Water Systems' Sloan Ratio % compare to WM and RSG?
Clearford Water Systems' Sloan Ratio % of -11.52% can be compared against companies in the Waste Management 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 Waste Management company?
A good Sloan Ratio % depends on the Waste Management 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 Clearford Water Systems and its competitors. Clearford Water Systems's current Sloan Ratio % is -11.52%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Clearford Water Systems stock overvalued right now?
Clearford Water Systems (CLIRF) has a current Sloan Ratio % of -11.52%. The current Sloan Ratio % is -11.52%. 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 Clearford Water Systems (CLIRF), the current Sloan Ratio % is -11.52% as of Sep. 2021. 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.
Clearford Water Systems Inc provides unified water infrastructure solutions. The company is the developer of the Clearford One system, which is a combination of the company's ClearDigest Smart Digester, Small Bore Sewer (SBS) technology, a watertight small diameter wastewater collection system, SBS ClearConvey, and ClearRecover, a wastewater treatment facility-based on the processed influent. It operates through two segments namely Clearford One and UV Pure. The company generates revenue through a sale in various countries such as Canada, the United States of America, India, South America, and other countries. It derives maximum revenue from the Clearford One segment.
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