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.
Rautaruukki Oyj's Sloan Ratio for the quarter that ended in Sep. 2014 was -4.84%.
As of Sep. 2014, Rautaruukki Oyj has a Sloan Ratio of -4.84%, indicating the company is in the safe zone and there is no funny business with accruals.
Rautaruukki Oyj Sloan Ratio % Historical Data
The historical data trend for Rautaruukki Oyj'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 Rautaruukki Oyj's Sloan Ratio %
For the Steel subindustry, Rautaruukki Oyj'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.
Rautaruukki Oyj's Sloan Ratio % Distribution in the Steel Industry
For the Steel industry and Basic Materials sector, Rautaruukki Oyj's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Rautaruukki Oyj's Sloan Ratio % falls into.
Rautaruukki Oyj 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.
Rautaruukki Oyj's Sloan Ratio for the fiscal year that ended in Dec. 2013 is calculated as
Rautaruukki Oyj's Net Income for the trailing twelve months (TTM) ended in Sep. 2014 was -10 (Dec. 2013 ) + -19 (Mar. 2014 ) + -2 (Jun. 2014 ) + -22 (Sep. 2014 ) = €-53 Mil.
Rautaruukki Oyj's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2014 was 79 (Dec. 2013 ) + -21 (Mar. 2014 ) + 45 (Jun. 2014 ) + 35 (Sep. 2014 ) = €138 Mil.
Rautaruukki Oyj's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2014 was -20 (Dec. 2013 ) + -16 (Mar. 2014 ) + -20 (Jun. 2014 ) + -26 (Sep. 2014 ) = €-82 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.
Rautaruukki Oyj (OHEL:RTRKS) 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. 2014, Rautaruukki Oyj has a Sloan Ratio of -4.84%, indicating the company is in the safe zone and there is no funny business with accruals.
Rautaruukki Oyj Sloan Ratio % Related Terms
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Rautaruukki Oyj supplies metal-based components, systems and integrated systems to construction and the engineering industry. The company's operations are structured into three divisions: construction, engineering, and steel business. Its construction division supplies steel construction solutions for commercial and industrial construction, as well as for infrastructure foundation and transport infrastructure projects. The divisions' product portfolio includes building frames, wall and roofing products, integrated systems for single and multi-story construction, bridges, traffic noise barriers and highway guard rails, piles, retaining wall structures and foundations for harbor construction. Its customers include developers, designs and builders of commercial, industrial and office premises, logistics and sports complexes and infrastructure services as well as roofing suppliers. Its engineering division supplies systems and components to the engineering industry, such as cabins, booms, masts and frames for goods and container handling, the construction industry and mining and forestry, telescopic booms, frames and parts; windmill components and oil sumps. Main markets serve international European companies, specifically the lifting, handling, and transportation equipment industry, the energy industry, the marine and offshore industry and the paper and wood industry. The Metals division supplies steel products associated with prefabrication, logistics and storage services. The division's product portfolio consists of hot and cold-rolled steels, metal and color-coated steels, tubes and profiles and stainless steel and aluminum sold as trading products. Its customers include the transportation equipment, construction, engineering and electronics industries in Europe and Russia.
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