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.
Magna International's Sloan Ratio for the quarter that ended in Sep. 2024 was 1.97%.
As of Sep. 2024, Magna International has a Sloan Ratio of 1.97%, indicating the company is in the safe zone and there is no funny business with accruals.
Magna International Sloan Ratio % Historical Data
The historical data trend for Magna International'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 Magna International's Sloan Ratio %
For the Auto Parts subindustry, Magna International'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.
Magna International's Sloan Ratio % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Magna International's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Magna International's Sloan Ratio % falls into.
Magna International 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.
Magna International's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Magna International's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was 248.507 (Dec. 2023 ) + 8.28 (Mar. 2024 ) + 290.777 (Jun. 2024 ) + 436.084 (Sep. 2024 ) = €984 Mil.
Magna International's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 1447.026 (Dec. 2023 ) + 240.12 (Mar. 2024 ) + 683.744 (Jun. 2024 ) + 655.027 (Sep. 2024 ) = €3,026 Mil.
Magna International's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -1041.712 (Dec. 2023 ) + -533.6 (Mar. 2024 ) + -619.643 (Jun. 2024 ) + -428.876 (Sep. 2024 ) = €-2,624 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.
Magna International (FRA:MGA) 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, Magna International has a Sloan Ratio of 1.97%, indicating the company is in the safe zone and there is no funny business with accruals.
Magna International Sloan Ratio % Related Terms
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Magna International prides itself on a highly entrepreneurial culture and a corporate constitution that outlines distribution of profits to various stakeholders. This automotive supplier's product groups include exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electric vehicle systems, tooling and engineering, and contract vehicle assembly. In 2023, 48% of Magna's $42.8 billion of revenue came from North America while Europe accounted for approximately 38% and Asia the remainder. The firm's top six customers constituted 76% of revenue with the top three being GM, Mercedes, and BMW. GM was the largest contributor at 14%. The company was founded in 1957, has over 179,000 employees, and is based in Aurora, Ontario.
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