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 Sep. 2024, Old Dominion Freight Line has a Sloan Ratio of 3.96%, indicating the company is in the safe zone and there is no funny business with accruals.
Old Dominion Freight Line 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 Old Dominion Freight Line's Sloan Ratio %
For the Trucking subindustry, Old Dominion Freight Line'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.
Old Dominion Freight Line's Sloan Ratio % Distribution in the Transportation Industry
For the Transportation industry and Industrials sector, Old Dominion Freight Line's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Old Dominion Freight Line's Sloan Ratio % falls into.
Old Dominion Freight Line 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.
Old Dominion Freight Line's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Old Dominion Freight Line's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was 322.815 (Dec. 2023 ) + 292.304 (Mar. 2024 ) + 322.045 (Jun. 2024 ) + 308.58 (Sep. 2024 ) = $1,246 Mil.
Old Dominion Freight Line's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 436.693 (Dec. 2023 ) + 423.893 (Mar. 2024 ) + 387.855 (Jun. 2024 ) + 446.476 (Sep. 2024 ) = $1,695 Mil.
Old Dominion Freight Line's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -79.535 (Dec. 2023 ) + -117.952 (Mar. 2024 ) + -264.857 (Jun. 2024 ) + -201.44 (Sep. 2024 ) = $-664 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.
Old Dominion Freight Line (NAS:ODFL) 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 Sep. 2024, Old Dominion Freight Line has a Sloan Ratio of 3.96%, indicating the company is in the safe zone and there is no funny business with accruals.
Old Dominion Freight Line Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Old Dominion Freight Line's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Old Dominion Freight Line is the second-largest less-than-truckload carrier in the United States, with more than 250 service centers and 11,000-plus tractors. It is one of the most disciplined and efficient providers in the trucking industry, and its profitability and capital returns are head and shoulders above its peers. Strategic initiatives revolve around boosting network density through market share gains and maintaining industry-leading service (including ultralow cargo claims) via steadfast infrastructure investment.
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