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.
Fastenal Co's Sloan Ratio for the quarter that ended in Sep. 2024 was 2.12%.
As of Sep. 2024, Fastenal Co has a Sloan Ratio of 2.12%, indicating the company is in the safe zone and there is no funny business with accruals.
Fastenal Co Sloan Ratio % Historical Data
The historical data trend for Fastenal Co'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 Fastenal Co's Sloan Ratio %
For the Industrial Distribution subindustry, Fastenal Co'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.
Fastenal Co's Sloan Ratio % Distribution in the Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, Fastenal Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Fastenal Co's Sloan Ratio % falls into.
Fastenal Co 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.
Fastenal Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Fastenal Co's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was 266.4 (Dec. 2023 ) + 297.7 (Mar. 2024 ) + 292.7 (Jun. 2024 ) + 298.1 (Sep. 2024 ) = $1,155 Mil.
Fastenal Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 354 (Dec. 2023 ) + 335.6 (Mar. 2024 ) + 258 (Jun. 2024 ) + 296.9 (Sep. 2024 ) = $1,245 Mil.
Fastenal Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -33 (Dec. 2023 ) + -48.4 (Mar. 2024 ) + -52.7 (Jun. 2024 ) + -55.9 (Sep. 2024 ) = $-190 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.
Fastenal Co (NAS:FAST) 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. 2024, Fastenal Co has a Sloan Ratio of 2.12%, indicating the company is in the safe zone and there is no funny business with accruals.
Fastenal Co Sloan Ratio % Related Terms
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Fastenal opened its first fastener store in 1967 in Winona, Minnesota. Since then, it has greatly expanded its footprint as well as its products and services. Today, Fastenal serves its 400,000 active customers through approximately 1,600 branches, over 1,800 on-site locations, and 15 distribution centers. Since 1993, the company has added other product categories, but fasteners remain its largest category at about 30%-35% of sales. Fastenal also offers customers supply chain solutions, such as vending and vendor-managed inventory.
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