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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.
As of Mar. 2026, Allison Transmission Holdings has a Sloan Ratio of 28.79%, indicating there is a warning stage of accrual build up.
Allison Transmission Holdings (NYSE:ALSN) 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. 2026, Allison Transmission Holdings has a Sloan Ratio of 28.79%, indicating there is a warning stage of accrual build up.
Allison Transmission Holdings Sloan Ratio % Related Terms
Allison Transmission Holdings 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 Auto Parts subindustry, Allison Transmission Holdings'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.
Allison Transmission Holdings Sloan Ratio % vs Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Allison Transmission Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Allison Transmission Holdings's Sloan Ratio % falls into.
Allison Transmission Holdings 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.
Allison Transmission Holdings's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 195 (Jun. 2025 ) + 137 (Sep. 2025 ) + 99 (Dec. 2025 ) + 112 (Mar. 2026 ) = $543 Mil.
Allison Transmission Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 184 (Jun. 2025 ) + 228 (Sep. 2025 ) + 243 (Dec. 2025 ) + 156 (Mar. 2026 ) = $811 Mil.
Allison Transmission Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -33 (Jun. 2025 ) + -49 (Sep. 2025 ) + -76 (Dec. 2025 ) + -2616 (Mar. 2026 ) = $-2,774 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.
Allison Transmission Holdings (ALSN) has a Sloan Ratio % of 28.79% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Allison Transmission Holdings and its competitors.
Is Allison Transmission Holdings' Sloan Ratio % too high?
Allison Transmission Holdings' current Sloan Ratio % is 28.79%. Overall, Allison Transmission Holdings has a GF Score™ of 96/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Allison Transmission Holdings' Sloan Ratio % compare to ALV and AUR?
Allison Transmission Holdings' Sloan Ratio % of 28.79% can be compared against companies in the Vehicles & Parts 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 Vehicles & Parts company?
A good Sloan Ratio % depends on the Vehicles & Parts 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 Allison Transmission Holdings and its competitors. Allison Transmission Holdings's current Sloan Ratio % is 28.79%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Allison Transmission Holdings stock overvalued right now?
Based on GuruFocus' analysis, Allison Transmission Holdings (ALSN) is currently considered Modestly Undervalued. The stock's GF Value™ is $130.66, compared to a current price of $116.21 — trading 11.1% below its estimated fair value. The current Sloan Ratio % is 28.79%. Allison Transmission Holdings' overall GF Score™ is 96/100 with 3 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 Allison Transmission Holdings (ALSN), the current Sloan Ratio % is 28.79% as of Mar. 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 Allison Transmission Holdings (ALSN) Overvalued in 2026?
Based on GuruFocus' analysis, Allison Transmission Holdings stock appears to be undervalued.
The current stock price of $116.21 is trading 11.1% below its estimated GF Value™ of $130.66.
GuruFocus considers Allison Transmission Holdings to be Modestly Undervalued.
Key valuation signals for ALSN:
Sloan Ratio %: 28.79%
GF Value™: $130.66 vs. price of $116.21 (11.1% below fair value)
No single metric tells the full story. See the ALSN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Allison Transmission Holdings Business Description
Allison Transmission is the largest manufacturer of fully automatic transmissions for medium- and heavy-duty commercial vehicles. Its automatic transmissions allow customers to achieve better fuel and operator efficiency than less expensive manual and automated manual transmissions. Allison serves several end markets, including on- and off-highway equipment and military vehicles. Its on-highway business commands approximately 60% global market share. The company's transmissions can be found in Class 4-8 trucks, buses, and a limited number of large passenger vehicles (heavy-duty pickup trucks and motorhomes). Allison also produces commercial hybrid propulsion systems and is developing fully electric powertrains.
96GF Score
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