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 Jun. 2016, ITT Educational Services has a Sloan Ratio of -5.21%, indicating the company is in the safe zone and there is no funny business with accruals.
ITT Educational Services 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.
Competitive Comparison of ITT Educational Services's Sloan Ratio %
For the Education & Training Services subindustry, ITT Educational Services'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.
ITT Educational Services's Sloan Ratio % Distribution in the Education Industry
For the Education industry and Consumer Defensive sector, ITT Educational Services's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where ITT Educational Services's Sloan Ratio % falls into.
ITT Educational Services 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.
ITT Educational Services's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
ITT Educational Services's Net Income for the trailing twelve months (TTM) ended in Jun. 2016 was 1.688 (Sep. 2015 ) + 10.447 (Dec. 2015 ) + 4.107 (Mar. 2016 ) + 4.31 (Jun. 2016 ) = $20.6 Mil.
ITT Educational Services's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2016 was 21.292 (Sep. 2015 ) + 23.391 (Dec. 2015 ) + 12.334 (Mar. 2016 ) + -6.747 (Jun. 2016 ) = $50.3 Mil.
ITT Educational Services's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2016 was -3.311 (Sep. 2015 ) + 5.12 (Dec. 2015 ) + -0.779 (Mar. 2016 ) + -0.305 (Jun. 2016 ) = $0.7 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.
ITT Educational Services (OTCPK:ESINQ) 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 Jun. 2016, ITT Educational Services has a Sloan Ratio of -5.21%, indicating the company is in the safe zone and there is no funny business with accruals.
ITT Educational Services Sloan Ratio % Related Terms
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ITT Educational Services (ITT Educational Services) Business Description
ITT Educational Services Inc is a United States based proprietary provider of postsecondary degree programs in the United States based on revenue and student enrollment. The company provides technology-oriented undergraduate and graduate degree programs through its accredited postsecondary institutions, ITT Technical Institutes and Daniel Webster College, to help students develop skills and knowledge that can be used to pursue career opportunities in a variety of fields.
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