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.
Dixons Retail's Sloan Ratio for the quarter that ended in Apr. 2014 was -11.65%.
As of Apr. 2014, Dixons Retail has a Sloan Ratio of -11.65%, indicating there is a warning stage of accrual build up.
Dixons Retail Sloan Ratio % Historical Data
The historical data trend for Dixons Retail'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 Dixons Retail's Sloan Ratio %
For the Specialty Retail subindustry, Dixons Retail'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.
Dixons Retail's Sloan Ratio % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Dixons Retail's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Dixons Retail's Sloan Ratio % falls into.
Dixons Retail 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.
Dixons Retail's Sloan Ratio for the fiscal year that ended in Apr. 2014 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Dixons Retail's Net Income for the trailing twelve months (TTM) ended in Apr. 2014 was -83.5 (Oct. 2013 ) + 14 (Apr. 2014 ) = £-70 Mil.
Dixons Retail's Cash Flow from Operations for the trailing twelve months (TTM) ended in Apr. 2014 was 92.7 (Oct. 2013 ) + 205.3 (Apr. 2014 ) = £298 Mil.
Dixons Retail's Cash Flow from Investing for the trailing twelve months (TTM) ended in Apr. 2014 was -26.5 (Oct. 2013 ) + -47.9 (Apr. 2014 ) = £-74 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.
Dixons Retail (LSE:DXNS) 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 Apr. 2014, Dixons Retail has a Sloan Ratio of -11.65%, indicating there is a warning stage of accrual build up.
Dixons Retail Sloan Ratio % Related Terms
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Dixons Retail PLC is an electrical retailer and service company which sell consumer electronics, personal computers, domestic appliances, photographic equipment, communication products and related services. The Group's reportable segments are; UK & Ireland comprises of electrical and computing retail chains as well as business to business activities. The division is engaged in multi-channel retail sales, associated peripherals and services and related financial and after sales services and also in business to business sales of computer hardware and software; Nordics operates in Norway, Sweden, Finland, Denmark, Iceland, Greenland and the Faroe Islands. The division engages in multi-channel retail sales and provided related product support services to its customers; Other International comprises operations in Italy, Greece, the Czech Republic, Slovakia, Turkey and the business to be closed in Spain which is excluded from underlying results. The Other International division engages in retail sales and provides related product support services to its customers in all of its markets; and Pure play e-commerce comprises pure play online retailers and operates in all of the countries in which the other divisions operate and across Europe.
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