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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. 2025, Cathay Financial Holding Co has a Sloan Ratio of -0.34%, indicating the company is in the safe zone and there is no funny business with accruals.
Cathay Financial Holding Co (LSE:CFHS) 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. 2025, Cathay Financial Holding Co has a Sloan Ratio of -0.34%, indicating the company is in the safe zone and there is no funny business with accruals.
Cathay Financial Holding Co Sloan Ratio % Related Terms
Cathay Financial Holding Co 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.
LSE:CFHS vs AFL, MET, PRU: Sloan Ratio % Comparison
For the Insurance - Life subindustry, Cathay Financial Holding Co'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.
Cathay Financial Holding Co Sloan Ratio % vs Insurance Industry
For the Insurance industry and Financial Services sector, Cathay Financial Holding Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Cathay Financial Holding Co's Sloan Ratio % falls into.
Cathay Financial Holding Co 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.
Cathay Financial Holding Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2025 was 970.779 (Mar. 2025 ) + 472.1 (Jun. 2025 ) + 942.45 (Sep. 2025 ) + 1037.241 (Dec. 2025 ) = $3,423 Mil.
Cathay Financial Holding Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2025 was -875.049 (Mar. 2025 ) + 7821.157 (Jun. 2025 ) + 1543.982 (Sep. 2025 ) + -1960.324 (Dec. 2025 ) = $6,530 Mil.
Cathay Financial Holding Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2025 was 318.146 (Mar. 2025 ) + 169.887 (Jun. 2025 ) + -823.572 (Sep. 2025 ) + -1203.177 (Dec. 2025 ) = $-1,539 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.
Cathay Financial Holding Co (LSE:CFHS) has a Sloan Ratio % of -0.34% as of Dec. 2025. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Cathay Financial Holding Co and its competitors.
Is Cathay Financial Holding Co's Sloan Ratio % too high?
Cathay Financial Holding Co's current Sloan Ratio % is -0.34%. Overall, Cathay Financial Holding Co has a GF Score™ of 49/100, reflecting its overall financial health beyond just this single metric.
How does Cathay Financial Holding Co's Sloan Ratio % compare to AFL and MET?
Cathay Financial Holding Co's Sloan Ratio % of -0.34% can be compared against companies in the Insurance industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for an Insurance company?
A good Sloan Ratio % depends on the Insurance industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Cathay Financial Holding Co and its competitors. Cathay Financial Holding Co's current Sloan Ratio % is -0.34%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Cathay Financial Holding Co stock overvalued right now?
Cathay Financial Holding Co (LSE:CFHS) has a current Sloan Ratio % of -0.34%. The stock's GF Value™ is $15.01, compared to a current price of $19.20 — trading 27.9% above its estimated fair value. The current Sloan Ratio % is -0.34%. Cathay Financial Holding Co's overall GF Score™ is 49/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Cathay Financial Holding Co (LSE:CFHS), the current Sloan Ratio % is -0.34% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Cathay Financial Holding Co (LSE:CFHS) Overvalued in 2026?
Based on GuruFocus' analysis, Cathay Financial Holding Co stock appears to be overvalued.
The current stock price of $19.20 is trading 27.9% above its estimated GF Value™ of $15.01.
Key valuation signals for LSE:CFHS:
Sloan Ratio %: -0.34%
GF Value™: $15.01 vs. price of $19.20 (27.9% above fair value)
No single metric tells the full story. See the LSE:CFHS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Cathay Financial Holding Co Ltd is a financial holding company. It has five operating segments Banking segment is engaged in permitted businesses of commercial banks; Life insurance segments is engaged in traditional insurance, investment-linked insurance and interest-sensitive sales of annuity insurance and providing financial planning services and policy loan services; Property insurance segment is engaged in fire insurance, marine insurance, land and air insurance, liability insurance, financial guarantee insurance, reinsurance and other insurance; Securities segment is engaged in brokerage, dealership, and underwriting business; and Other operating segment of which majority of revenue is from Life insurance. Geographically revenue comes from Taiwan.
49GF Score
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Sloan Ratio % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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