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.
Fuel Tech's Sloan Ratio for the quarter that ended in Dec. 2023 was 8.36%.
As of Dec. 2023, Fuel Tech has a Sloan Ratio of 8.36%, indicating the company is in the safe zone and there is no funny business with accruals.
Fuel Tech Sloan Ratio % Historical Data
The historical data trend for Fuel Tech'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 Fuel Tech's Sloan Ratio %
For the Pollution & Treatment Controls subindustry, Fuel Tech'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.
Fuel Tech's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Fuel Tech's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Fuel Tech's Sloan Ratio % falls into.
Fuel Tech 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.
Fuel Tech's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Fuel Tech's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -0.414 (Mar. 2023 ) + -1.044 (Jun. 2023 ) + 0.459 (Sep. 2023 ) + -0.539 (Dec. 2023 ) = $-1.54 Mil.
Fuel Tech's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 1.01 (Mar. 2023 ) + -0.993 (Jun. 2023 ) + 0.374 (Sep. 2023 ) + 0.305 (Dec. 2023 ) = $0.70 Mil.
Fuel Tech's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -8.715 (Mar. 2023 ) + 0.427 (Jun. 2023 ) + -1.939 (Sep. 2023 ) + 3.783 (Dec. 2023 ) = $-6.44 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.
Fuel Tech (NAS:FTEK) 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 Dec. 2023, Fuel Tech has a Sloan Ratio of 8.36%, indicating the company is in the safe zone and there is no funny business with accruals.
Fuel Tech Sloan Ratio % Related Terms
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Fuel Tech Inc is an technology provider of boiler optimization, efficiency improvement, and air pollution reduction to utility and industrial customers. The company operates in two segments, Air Pollution Control and Fuel Chem. The Air Pollution Control technology segment includes technologies to reduce NOx emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion sources. TheFuel Chem technology segment uses chemical processes in combination with advanced Computational Fluid Dynamics and Chemical Kinetics Modeling boiler modeling for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace using TIFI Targeted In-Furnace Injection technology.
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