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.
As of Dec. 2023, China Everbright Water has a Sloan Ratio of 5.06%, indicating the company is in the safe zone and there is no funny business with accruals.
China Everbright Water Sloan Ratio % Historical Data
* 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 China Everbright Water's Sloan Ratio %
For the Utilities - Regulated Water subindustry, China Everbright Water'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.
China Everbright Water's Sloan Ratio % Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, China Everbright Water's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where China Everbright Water's Sloan Ratio % falls into.
China Everbright Water 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.
China Everbright Water's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
China Everbright Water's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 632.188 (Jun. 2023 ) + 555.224 (Dec. 2023 ) = HK$1,187 Mil.
China Everbright Water's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -534.826 (Jun. 2023 ) + 6.043 (Dec. 2023 ) = HK$-529 Mil.
China Everbright Water's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 4.065 (Jun. 2023 ) + -20.706 (Dec. 2023 ) = HK$-17 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.
China Everbright Water (HKSE:01857) 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, China Everbright Water has a Sloan Ratio of 5.06%, indicating the company is in the safe zone and there is no funny business with accruals.
China Everbright Water Sloan Ratio % Related Terms
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China Everbright Water (HKSE:01857) Business Description
China Everbright Water Ltd provides water supply, waste water treatment, sludge treatment, and other environmental services. It designs, constructs, and operates water treatment plants, and extracts energy from water discharged by the plants to power air-conditioning for various buildings. Concession arrangements from various Chinese government authorities span multiple years, and allow the company to operate plants and charge users a fee for consumption. Under the arrangements, China Everbright is obligated to maintain the plants, and receives annual payments from the grantors. Raw materials and consumables are utilized by experienced technicians to repair and maintain facilities. Majority of sales and assets are generated and located in China.
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