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 Nov. 2024, MSC Industrial Direct Co has a Sloan Ratio of -2.84%, indicating the company is in the safe zone and there is no funny business with accruals.
MSC Industrial Direct 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.
Competitive Comparison of MSC Industrial Direct Co's Sloan Ratio %
For the Industrial Distribution subindustry, MSC Industrial Direct 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.
MSC Industrial Direct Co's Sloan Ratio % Distribution in the Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, MSC Industrial Direct Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where MSC Industrial Direct Co's Sloan Ratio % falls into.
MSC Industrial Direct 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.
MSC Industrial Direct Co's Sloan Ratio for the fiscal year that ended in Aug. 2024 is calculated as
MSC Industrial Direct Co's Net Income for the trailing twelve months (TTM) ended in Nov. 2024 was 61.847 (Feb. 2024 ) + 71.705 (May. 2024 ) + 55.692 (Aug. 2024 ) + 46.623 (Nov. 2024 ) = $236 Mil.
MSC Industrial Direct Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Nov. 2024 was 78.743 (Feb. 2024 ) + 143.522 (May. 2024 ) + 107.263 (Aug. 2024 ) + 101.868 (Nov. 2024 ) = $431 Mil.
MSC Industrial Direct Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Nov. 2024 was -35.218 (Feb. 2024 ) + -29.562 (May. 2024 ) + -40.183 (Aug. 2024 ) + -20.408 (Nov. 2024 ) = $-125 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.
MSC Industrial Direct Co (NYSE:MSM) 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 Nov. 2024, MSC Industrial Direct Co has a Sloan Ratio of -2.84%, indicating the company is in the safe zone and there is no funny business with accruals.
MSC Industrial Direct Co Sloan Ratio % Related Terms
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MSC Industrial Direct is one of the largest industrial distributors with a focus on metalworking and maintenance, repair, and operations products and services. The company offers over 2 million products through its distribution network, which has 14 fulfillment or regional inventory centers. Although MSC has a presence in Canada, Mexico, and the United Kingdom, it primarily operates in the United States. In fiscal 2024, 95% of the firm's $3.8 billion of sales was generated in the US.
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