Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Sloan Ratio % : 10.44% (As of Mar. 2024)

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What is Ali Alghanim Sons Automotive Co KSC Sloan Ratio %?

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.

Ali Alghanim Sons Automotive Co KSC's Sloan Ratio for the quarter that ended in Mar. 2024 was 10.44%.

As of Mar. 2024, Ali Alghanim Sons Automotive Co KSC has a Sloan Ratio of 10.44%, indicating there is a warning stage of accrual build up.

Ali Alghanim Sons Automotive Co KSC Sloan Ratio % Historical Data

The historical data trend for Ali Alghanim Sons Automotive Co KSC'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.

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Ali Alghanim Sons Automotive Co KSC Sloan Ratio % Chart

Ali Alghanim Sons Automotive Co KSC Annual Data

Trend

Dec21

Dec22

Dec23

Sloan Ratio %

-7.66

-0.05

9.49

Ali Alghanim Sons Automotive Co KSC Quarterly Data
	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Sloan Ratio %	Get a 7-Day Free Trial							4.73	9.01	8.65	9.49	10.44

Competitive Comparison of Ali Alghanim Sons Automotive Co KSC's Sloan Ratio %

For the Auto & Truck Dealerships subindustry, Ali Alghanim Sons Automotive Co KSC'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.

Ali Alghanim Sons Automotive Co KSC's Sloan Ratio % Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Ali Alghanim Sons Automotive Co KSC's Sloan Ratio % distribution charts can be found below:

* The bar in red indicates where Ali Alghanim Sons Automotive Co KSC's Sloan Ratio % falls into.

Ali Alghanim Sons Automotive Co KSC 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.

Ali Alghanim Sons Automotive Co KSC's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as

Sloan Ratio	=	(Net Income (A: Dec. 2023 )	-	Cash Flow from Operations (A: Dec. 2023 )
	-	Cash Flow from Investing (A: Dec. 2023 ))	/	Total Assets (A: Dec. 2023 )
	=	(28.481	-	28.278
	-	-20.966)	/	223.182
	=	9.49%

Ali Alghanim Sons Automotive Co KSC's Sloan Ratio for the quarter that ended in Mar. 2024 is calculated as

Sloan Ratio	=	(Net Income (TTM)	-	Cash Flow from Operations (TTM))
	-	Cash Flow from Investing (TTM))	/	Total Assets (Q: Mar. 2024 )
	=	(28.808	-	27.311
	-	-22.969)	/	234.416
	=	10.44%

Ali Alghanim Sons Automotive Co KSC's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 7.425 (Jun. 2023 ) + 7.513 (Sep. 2023 ) + 7.553 (Dec. 2023 ) + 6.317 (Mar. 2024 ) = KWD28.8 Mil.
Ali Alghanim Sons Automotive Co KSC's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 1.732 (Jun. 2023 ) + 3.297 (Sep. 2023 ) + 12.579 (Dec. 2023 ) + 9.703 (Mar. 2024 ) = KWD27.3 Mil.
Ali Alghanim Sons Automotive Co KSC's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -5.891 (Jun. 2023 ) + -2.019 (Sep. 2023 ) + -7.919 (Dec. 2023 ) + -7.14 (Mar. 2024 ) = KWD-23.0 Mil.

Ali Alghanim Sons Automotive Co KSC (KUW:ALG) 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.

According to How to Beat the Market with the Sloan Ratio:

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 Mar. 2024, Ali Alghanim Sons Automotive Co KSC has a Sloan Ratio of 10.44%, indicating there is a warning stage of accrual build up.

Ali Alghanim Sons Automotive Co KSC Sloan Ratio % Related Terms

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Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Ali Alghanim Sons Automotive Co KSC (KUW:ALG) » Definitions » Sloan Ratio %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Airport Road 55, P.O. Box 21540, Safat, Opposite Kaifan Telecommunication, Shuwaikh, KWT, 13076

Website

https://alg.com.kw

Ali Alghanim Sons Automotive Co KSC is engaged in the automotive business. The Primary Activities of the Company are selling and purchasing cars and spare parts, importing and exporting light and heavy vehicles and cars, renting cars, maintaining light & heavy vehicles and cars, trading auto spare parts, and renting equipment and their maintenance. The Group is divided into four main geographical segments which are the State of Kuwait, Iraq, Egypt and the United Arab Emirates. The majority is derived from Kuwait.