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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.
Ares Commercial Real Estate (FRA:41I) 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. 2026, Ares Commercial Real Estate has a Sloan Ratio of 20.10%, indicating there is a warning stage of accrual build up.
Ares Commercial Real Estate Sloan Ratio % Related Terms
Ares Commercial Real Estate 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.
FRA:41I vs REFI, RC, MITT: Sloan Ratio % Comparison
For the REIT - Mortgage subindustry, Ares Commercial Real Estate'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.
Ares Commercial Real Estate Sloan Ratio % vs REITs Industry
For the REITs industry and Real Estate sector, Ares Commercial Real Estate's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Ares Commercial Real Estate's Sloan Ratio % falls into.
Ares Commercial Real Estate 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.
Ares Commercial Real Estate's Net Income for the trailing twelve months (TTM) ended in Jun. 2026 was 3.964 (Sep. 2025 ) + -3.301 (Dec. 2025 ) + -8.308 (Mar. 2026 ) + 3.804 (Jun. 2026 ) = €-3.84 Mil.
Ares Commercial Real Estate's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2026 was 3.269 (Sep. 2025 ) + 3.951 (Dec. 2025 ) + -48.966 (Mar. 2026 ) + 55.158 (Jun. 2026 ) = €13.41 Mil.
Ares Commercial Real Estate's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2026 was 96.443 (Sep. 2025 ) + -247.703 (Dec. 2025 ) + -77.655 (Mar. 2026 ) + -105.465 (Jun. 2026 ) = €-334.38 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.
Ares Commercial Real Estate (FRA:41I) has a Sloan Ratio % of 20.10% as of Jun. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Ares Commercial Real Estate and its competitors.
Is Ares Commercial Real Estate's Sloan Ratio % too high?
Ares Commercial Real Estate's current Sloan Ratio % is 20.10%. Overall, Ares Commercial Real Estate has a GF Score™ of 43/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Ares Commercial Real Estate's Sloan Ratio % compare to REFI and RC?
Ares Commercial Real Estate's Sloan Ratio % of 20.10% can be compared against companies in the REITs 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 REITs company?
A good Sloan Ratio % depends on the REITs 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 Ares Commercial Real Estate and its competitors. Ares Commercial Real Estate's current Sloan Ratio % is 20.10%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Ares Commercial Real Estate stock overvalued right now?
Based on GuruFocus' analysis, Ares Commercial Real Estate (FRA:41I) is currently considered Possible Value Trap. The stock's GF Value™ is €9.98, compared to a current price of €4.06 — trading 59.3% below its estimated fair value. The current Sloan Ratio % is 20.10%. Ares Commercial Real Estate's overall GF Score™ is 43/100 with 4 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 Ares Commercial Real Estate (FRA:41I), the current Sloan Ratio % is 20.10% as of Jun. 2026. 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 Ares Commercial Real Estate (FRA:41I) Overvalued in 2026?
Based on GuruFocus' analysis, Ares Commercial Real Estate stock appears to be undervalued.
The current stock price of €4.06 is trading 59.3% below its estimated GF Value™ of €9.98.
GuruFocus considers Ares Commercial Real Estate to be Possible Value Trap.
Key valuation signals for FRA:41I:
Sloan Ratio %: 20.10%
GF Value™: €9.98 vs. price of €4.06 (59.3% below fair value)
No single metric tells the full story. See the FRA:41I stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Ares Commercial Real Estate Corp is a specialty finance company and a real estate investment trust mainly engaged in originating and investing in commercial real estate (CRE) loans and related investments. It operates in one segment, namely originating and managing a diversified portfolio of CRE debt-related investments. The company recognizes the majority of its revenues in the form of interest income, which it receives from loans.
43GF 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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