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 Mar. 2024, Nippon Paint Holdings Co has a Sloan Ratio of 1.94%, indicating the company is in the safe zone and there is no funny business with accruals.
Nippon Paint Holdings 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 Nippon Paint Holdings Co's Sloan Ratio %
For the Specialty Chemicals subindustry, Nippon Paint Holdings 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.
Nippon Paint Holdings Co's Sloan Ratio % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, Nippon Paint Holdings Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Nippon Paint Holdings Co's Sloan Ratio % falls into.
Nippon Paint Holdings 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.
Nippon Paint Holdings Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Nippon Paint Holdings Co's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 251.538 (Jun. 2023 ) + 220.136 (Sep. 2023 ) + 173.856 (Dec. 2023 ) + 202.111 (Mar. 2024 ) = $848 Mil.
Nippon Paint Holdings Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 440.88 (Jun. 2023 ) + 353.289 (Sep. 2023 ) + 562.156 (Dec. 2023 ) + -2.63 (Mar. 2024 ) = $1,354 Mil.
Nippon Paint Holdings Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -127.074 (Jun. 2023 ) + -218.418 (Sep. 2023 ) + -376.687 (Dec. 2023 ) + -157.444 (Mar. 2024 ) = $-880 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.
Nippon Paint Holdings Co (OTCPK:NPCPF) 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 Mar. 2024, Nippon Paint Holdings Co has a Sloan Ratio of 1.94%, indicating the company is in the safe zone and there is no funny business with accruals.
Nippon Paint Holdings Co Sloan Ratio % Related Terms
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Nippon Paint Holdings Co (Nippon Paint Holdings Co) Business Description
Nippon Paint Holdings Co Ltd is a holding company, which, through its subsidiaries, manufactures and sells a variety of paint and coating products. The firm organizes itself into four operating companies based on end market. The automotive paints division sells paint and temperature-control coatings that are used to cover the body of an automobile. The industrial-use paints division sells paints and coatings for trains and ships. The trade-use paints division sells paints and coatings that are used on buildings, bridges, and roads. The surface treatments division sells anti-corrosive and anti-rust coatings for metal products and electronics. The company organizes itself into three segments based on geography: Japan, Asia, and Americas. The majority of revenue comes from Japan.
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