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.
GFI Group's Sloan Ratio for the quarter that ended in Sep. 2015 was 7.95%.
As of Sep. 2015, GFI Group has a Sloan Ratio of 7.95%, indicating the company is in the safe zone and there is no funny business with accruals.
GFI Group Sloan Ratio % Historical Data
The historical data trend for GFI Group'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 GFI Group's Sloan Ratio %
For the Capital Markets subindustry, GFI Group'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.
GFI Group's Sloan Ratio % Distribution in the Capital Markets Industry
For the Capital Markets industry and Financial Services sector, GFI Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where GFI Group's Sloan Ratio % falls into.
GFI Group 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.
GFI Group's Sloan Ratio for the fiscal year that ended in Dec. 2014 is calculated as
GFI Group's Net Income for the trailing twelve months (TTM) ended in Sep. 2015 was -5.319 (Dec. 2014 ) + -18.409 (Mar. 2015 ) + -1.585 (Jun. 2015 ) + 9.969 (Sep. 2015 ) = €-15.3 Mil.
GFI Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2015 was 36.775 (Dec. 2014 ) + -60.487 (Mar. 2015 ) + 10.634 (Jun. 2015 ) + 38.03 (Sep. 2015 ) = €25.0 Mil.
GFI Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2015 was 11.291 (Dec. 2014 ) + -53.574 (Mar. 2015 ) + -40.969 (Jun. 2015 ) + -37.555 (Sep. 2015 ) = €-120.8 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.
GFI Group (FRA:GDH1) 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. 2015, GFI Group has a Sloan Ratio of 7.95%, indicating the company is in the safe zone and there is no funny business with accruals.
GFI Group Sloan Ratio % Related Terms
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GFI Group Inc was incorporated under the laws of the State of Delaware in 2001. The Company provides wholesale brokerage services, clearing services and electronic execution and trading support products for financial markets. It provide brokerage and trade execution services, clearing services, market data and trading platform and other software products to institutional customers in markets for a range of fixed income, financial, equity and commodity instruments. The Company provides execution services for its institutional wholesale customers by either matching their trading needs with counterparties having reciprocal interests or directing their orders to an exchange or other trading venue. The Company offers its customers a hybrid brokerage approach, combining a range of telephonic and electronic trade execution services, depending on the nature of the products and the specific needs of its customers. The Company operates in five business segments: Americas Brokerage; Europe, the Middle East and Africa Brokerage; Asia Brokerage, Clearing and Backed Trading and All Other. Its brokerage operations provide brokerage services in four product categories: fixed income, financial, equity and commodity. It's Clearing and Backed Trading segment encompasses its clearing, risk management, settlement and other back-office services, as well as the capital the Company provide to start-up trading groups, small hedge funds, market-makers and individual traders. The All Other segment captures revenues and costs that are not directly assignable to the brokerage or clearing and backed trading operating business segments, consisting of Company's corporate business activities and operations and commercial revenues from sales and licensing of trading systems software, analytic and market data. The Company offers products and services including Fixed Income Products, Financial Products, Equity Products, Commodity Products, Clearing and Settlement Services, and Software, Analytic and Market Data. The Company's competitors include ICAP Plc, Tullett Prebon Plc, CME, the Chicago Board Options Exchange, and Eurex and Euronext. The Company's businesses are subject to extensive regulation by government and self-regulatory organizations both in the United States and abroad.
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