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.
Lotus Horizon Holdings's Sloan Ratio for the quarter that ended in Sep. 2024 was -5.53%.
Warning Sign:
When sloan ratio (-28.16)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Sep. 2024, Lotus Horizon Holdings has a Sloan Ratio of -5.53%, indicating the company is in the safe zone and there is no funny business with accruals.
Lotus Horizon Holdings 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 Lotus Horizon Holdings's Sloan Ratio %
For the Engineering & Construction subindustry, Lotus Horizon Holdings'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.
Lotus Horizon Holdings's Sloan Ratio % Distribution in the Construction Industry
For the Construction industry and Industrials sector, Lotus Horizon Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Lotus Horizon Holdings's Sloan Ratio % falls into.
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.
Lotus Horizon Holdings's Sloan Ratio for the fiscal year that ended in Mar. 2024 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Lotus Horizon Holdings's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was 2.181 (Mar. 2024 ) + 2.019 (Sep. 2024 ) = HK$4.2 Mil.
Lotus Horizon Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 32.653 (Mar. 2024 ) + -17.007 (Sep. 2024 ) = HK$15.6 Mil.
Lotus Horizon Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was 0.88 (Mar. 2024 ) + -2.869 (Sep. 2024 ) = HK$-2.0 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.
Lotus Horizon Holdings (HKSE:06063) 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, Lotus Horizon Holdings has a Sloan Ratio of -5.53%, indicating the company is in the safe zone and there is no funny business with accruals.
Lotus Horizon Holdings Sloan Ratio % Related Terms
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Lotus Horizon Holdings Ltd is a subcontractor engaged in the provision of design, supply, and installation services for facade work and building metal finishing work projects in Hong Kong. The company provides its services for commercial properties, residential properties, and public facilities in Hong Kong, including public facilities projects initiated by the Hong Kong Government and residential and commercial properties with distinguished and remarkable designs. The company's operating segments are Facade works projects, which is the key revenue-driving business, and Building metal finishing works projects.
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