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.
Invensys's Sloan Ratio for the quarter that ended in Sep. 2013 was 27.09%.
As of Sep. 2013, Invensys has a Sloan Ratio of 27.09%, indicating there is a warning stage of accrual build up.
Invensys Sloan Ratio % Historical Data
The historical data trend for Invensys'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 Invensys's Sloan Ratio %
For the Specialty Industrial Machinery subindustry, Invensys'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.
Invensys's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Invensys's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Invensys's Sloan Ratio % falls into.
Invensys 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.
Invensys's Sloan Ratio for the fiscal year that ended in Mar. 2013 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Invensys's Net Income for the trailing twelve months (TTM) ended in Sep. 2013 was 79.179 (Mar. 2013 ) + 1746.521 (Sep. 2013 ) = €1,826 Mil.
Invensys's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2013 was 220.072 (Mar. 2013 ) + -391.81 (Sep. 2013 ) = €-172 Mil.
Invensys's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2013 was -96.646 (Mar. 2013 ) + 1444.946 (Sep. 2013 ) = €1,348 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.
Invensys (FRA:SBPD) 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. 2013, Invensys has a Sloan Ratio of 27.09%, indicating there is a warning stage of accrual build up.
Invensys Sloan Ratio % Related Terms
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Invensys PLC is a technology company that works in partnership with industrial and commercial customers to design and supply advanced technologies that optimise operational performance and proï¬tability. The Company is grouped into four new business segments - Software, Industrial Automation, Energy Controls and Appliance. The Company's divisions include; Invensys Operations Management which is a technology, software and consulting business that creates and applies technologies to enable the safe and efï¬cient operation of industrial and commercial operations such as oil reï¬neries, fossil fuel and nuclear power plants, petrochemical works and other manufacturing sites. Invensys Controls designs, engineers and manufactures products, components, systems and services used in appliances, heating, air conditioning/cooling and refrigeration products across a range of industries in residential and commercial markets. The Software segment consists of the software businesses previously within Invensys Operations Management and includes Wonderware, SimSciTM and Avantis brands. Industrial Automation segment consists of the systems businesses of our Foxboro distributed control systems (DCS) and Triconex safety systems with the addition of the Foxboro measurement and instrumentation products previously within the equipment business of Invensys Operations Management. Energy Controls segment consists of the Eurotherm and IMServ businesses previously included within the equipment business of Invensys Operations Management, together with the residential heating and commercial businesses that were formerly part of Invensys Controls. Appliance segment consists of the Appliance controls line of business previously within Invensys Controls, together with the appliance replacement parts business formerly within Wholesale, also part of the former Invensys Controls.
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