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.
Northeast Bank's Sloan Ratio for the quarter that ended in Dec. 2023 was 2.68%.
Warning Sign:
When sloan ratio (42.32)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Dec. 2023, Northeast Bank has a Sloan Ratio of 2.68%, indicating the company is in the safe zone and there is no funny business with accruals.
Northeast Bank Sloan Ratio % Historical Data
The historical data trend for Northeast Bank'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 Northeast Bank's Sloan Ratio %
For the Banks - Regional subindustry, Northeast Bank'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.
Northeast Bank's Sloan Ratio % Distribution in the Banks Industry
For the Banks industry and Financial Services sector, Northeast Bank's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Northeast Bank's Sloan Ratio % falls into.
Northeast Bank 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.
Northeast Bank's Sloan Ratio for the fiscal year that ended in Jun. 2023 is calculated as
Northeast Bank's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 12.517 (Mar. 2023 ) + 12.085 (Jun. 2023 ) + 15.172 (Sep. 2023 ) + 14.054 (Dec. 2023 ) = $53.8 Mil.
Northeast Bank's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 30.829 (Mar. 2023 ) + 13.288 (Jun. 2023 ) + -4.054 (Sep. 2023 ) + 2.116 (Dec. 2023 ) = $42.2 Mil.
Northeast Bank's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -7.235 (Mar. 2023 ) + -13.933 (Jun. 2023 ) + 20.197 (Sep. 2023 ) + -66.884 (Dec. 2023 ) = $-67.9 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.
Northeast Bank (NAS:NBN) 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. 2023, Northeast Bank has a Sloan Ratio of 2.68%, indicating the company is in the safe zone and there is no funny business with accruals.
Northeast Bank Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Northeast Bank's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Northeast Bank (Northeast Bank) Business Description
Northeast Bank provides banking and financial services to individual and corporate customers in the US. The firm conducts its loan-related activities through three primary channels: the Community Banking Division, the Loan Acquisition and Servicing Group, and the Small Business Administration Division. Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, consumer loans and small business administration loans. The firm also provides telephone banking, online banking, mobile banking, and remote deposit capture services. The revenue of the company is derived primarily from interest and dividends from the bank.
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