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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.
Educational Development (NAS:EDUC) 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 May. 2026, Educational Development has a Sloan Ratio of -54.13%, indicating earnings are more likely to be made up of accruals.
Educational Development Sloan Ratio % Related Terms
Educational Development 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.
For the Publishing subindustry, Educational Development'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.
Educational Development Sloan Ratio % vs Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Educational Development's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Educational Development'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.
Educational Development's Sloan Ratio for the fiscal year that ended in Feb. 2026 is calculated as
Educational Development's Net Income for the trailing twelve months (TTM) ended in May. 2026 was -1.295 (Aug. 2025 ) + 7.802 (Nov. 2025 ) + -3.107 (Feb. 2026 ) + -1.396 (May. 2026 ) = $2.00 Mil.
Educational Development's Cash Flow from Operations for the trailing twelve months (TTM) ended in May. 2026 was 0.063 (Aug. 2025 ) + 2.545 (Nov. 2025 ) + -1.999 (Feb. 2026 ) + 0.564 (May. 2026 ) = $1.17 Mil.
Educational Development's Cash Flow from Investing for the trailing twelve months (TTM) ended in May. 2026 was -0.102 (Aug. 2025 ) + 29.744 (Nov. 2025 ) + -0.091 (Feb. 2026 ) + -0.095 (May. 2026 ) = $29.46 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.
Educational Development (EDUC) has a Sloan Ratio % of -54.13% as of May. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Educational Development and its competitors.
Is Educational Development's Sloan Ratio % too high?
Educational Development's current Sloan Ratio % is -54.13%. Overall, Educational Development has a GF Score™ of 45/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Educational Development's Sloan Ratio % compare to IDWM and TNMG?
Educational Development's Sloan Ratio % of -54.13% can be compared against companies in the Media - Diversified 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 a Media - Diversified company?
A good Sloan Ratio % depends on the Media - Diversified 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 Educational Development and its competitors. Educational Development's current Sloan Ratio % is -54.13%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Educational Development stock overvalued right now?
Based on GuruFocus' analysis, Educational Development (EDUC) is currently considered Significantly Overvalued. The stock's GF Value™ is $0.79, compared to a current price of $1.37 — trading 73.4% above its estimated fair value. The current Sloan Ratio % is -54.13%. Educational Development's overall GF Score™ is 45/100 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 Educational Development (EDUC), the current Sloan Ratio % is -54.13% as of May. 2026. 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 Educational Development (EDUC) Overvalued in 2026?
Based on GuruFocus' analysis, Educational Development stock appears to be overvalued.
The current stock price of $1.37 is trading 73.4% above its estimated GF Value™ of $0.79.
GuruFocus considers Educational Development to be Significantly Overvalued.
Key valuation signals for EDUC:
Sloan Ratio %: -54.13%
GF Value™: $0.79 vs. price of $1.37 (73.4% above fair value)
No single metric tells the full story. See the EDUC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Educational Development Corp distributes books and educational products and publications through its PaperPie and EDC Publishing divisions to individual consumers, book, toy and gift stores, libraries and home educators located throughout the United States. The company is the owner and exclusive publisher of Kane Miller children's books; Learning Wrap-Ups, maker of educational manipulatives; and SmartLab Toys, maker of STEAM-based toys and games. It also the exclusive United States Multi-Level Marketing (MLM) distributor of Usborne Publishing Limited (Usborne) children's books. It sell children's books, educational toys and games and other related products. It has two reportable segments: PaperPie and Publishing of which majority of revenue comes from Paperpie.
45GF Score
Get the complete analysis for EDUC
Sloan Ratio % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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