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.
5E Advanced Materials's Sloan Ratio for the quarter that ended in Dec. 2024 was -54.64%.
Warning Sign:
When sloan ratio (-31.23)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2024, 5E Advanced Materials has a Sloan Ratio of -54.64%, indicating earnings are more likely to be made up of accruals.
5E Advanced Materials Sloan Ratio % Historical Data
The historical data trend for 5E Advanced 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 5E Advanced Materials's Sloan Ratio %
For the Specialty Chemicals subindustry, 5E Advanced 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.
5E Advanced Materials's Sloan Ratio % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, 5E Advanced Materials's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where 5E Advanced Materials'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.
5E Advanced Materials's Sloan Ratio for the fiscal year that ended in Jun. 2024 is calculated as
5E Advanced Materials's Net Income for the trailing twelve months (TTM) ended in Dec. 2024 was -25.905 (Mar. 2024 ) + -16.122 (Jun. 2024 ) + -12.859 (Sep. 2024 ) + -14.262 (Dec. 2024 ) = $-69.15 Mil.
5E Advanced Materials's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2024 was -4.865 (Mar. 2024 ) + -7.235 (Jun. 2024 ) + -6.375 (Sep. 2024 ) + -5.302 (Dec. 2024 ) = $-23.78 Mil.
5E Advanced Materials's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2024 was -2.392 (Mar. 2024 ) + -1.309 (Jun. 2024 ) + -0.4 (Sep. 2024 ) + -0.381 (Dec. 2024 ) = $-4.48 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.
5E Advanced Materials (NAS:FEAM) 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. 2024, 5E Advanced Materials has a Sloan Ratio of -54.64%, indicating earnings are more likely to be made up of accruals.
5E Advanced Materials Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of 5E Advanced Materials's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
5E Advanced Materials Inc is an exploration stage company focused on becoming a vertically integrated supplier of specialty boron and boron derivative materials whose mission is to enable decarbonization, increase food security, and ensure domestic supply of critical materials. It has a project located in southern California underpinned by a mineral resource that includes boron and lithium, with the boron being contained in a conventional boron mineral known as colemanite. The company seeks to extract and process the minerals into boric acid, boron materials, lithium carbonate, and potentially other co-products on a commercial scale.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
FEAM has been successfully added to your 