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.
Family Dollar Stores's Sloan Ratio for the quarter that ended in May. 2015 was -3.78%.
As of May. 2015, Family Dollar Stores has a Sloan Ratio of -3.78%, indicating the company is in the safe zone and there is no funny business with accruals.
Family Dollar Stores Sloan Ratio % Historical Data
The historical data trend for Family Dollar Stores'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 Family Dollar Stores's Sloan Ratio %
For the Discount Stores subindustry, Family Dollar Stores'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.
Family Dollar Stores's Sloan Ratio % Distribution in the Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Family Dollar Stores's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Family Dollar Stores's Sloan Ratio % falls into.
Family Dollar Stores 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.
Family Dollar Stores's Sloan Ratio for the fiscal year that ended in Aug. 2014 is calculated as
Family Dollar Stores's Net Income for the trailing twelve months (TTM) ended in May. 2015 was 25.879 (Aug. 2014 ) + 33.184 (Nov. 2014 ) + 67.578 (Feb. 2015 ) + 71.549 (May. 2015 ) = €198 Mil.
Family Dollar Stores's Cash Flow from Operations for the trailing twelve months (TTM) ended in May. 2015 was 162.337 (Aug. 2014 ) + -74.701 (Nov. 2014 ) + 172.628 (Feb. 2015 ) + 214.654 (May. 2015 ) = €475 Mil.
Family Dollar Stores's Cash Flow from Investing for the trailing twelve months (TTM) ended in May. 2015 was 45.372 (Aug. 2014 ) + -66.949 (Nov. 2014 ) + -55.655 (Feb. 2015 ) + -66.459 (May. 2015 ) = €-144 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.
Family Dollar Stores (FRA:FAY) 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 May. 2015, Family Dollar Stores has a Sloan Ratio of -3.78%, indicating the company is in the safe zone and there is no funny business with accruals.
Family Dollar Stores Sloan Ratio % Related Terms
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Family Dollar Stores (FRA:FAY) Business Description
Family Dollar Stores Inc was incorporated in November 1959. The Company provides consumers with a selection of competitively priced merchandise in convenient neighbourhood stores. Its merchandise assortment includes Consumables, Home Products, Apparel and Accessories, and Seasonal and Electronics. It classifies the combination of Home Products, Apparel and Accessories, and Seasonal and Electronics as Discretionary. It operates general merchandise retail discount stores in 46 states, serving the basic needs of customers primarily in the low- and middle-income brackets. The stores are supported by 11 distribution centers and one Store Support Center. It competes for sales and store locations in varying degrees with international, national, regional and local retailing establishments, other discount stores, department stores, variety stores, dollar stores, discount clothing stores, drug stores, grocery stores, convenience stores, outlet stores, warehouse stores and other stores. The Company's trademark includes Family Dollar and Family Dollar Stores. Its business is subject to federal, state, local, and international laws, rules, and regulations, such as state and local wage and hour laws, anti-corruption laws, import and export laws, unclaimed property laws, and many others.
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