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.
Outerwall's Sloan Ratio for the quarter that ended in Jun. 2016 was -5.74%.
As of Jun. 2016, Outerwall has a Sloan Ratio of -5.74%, indicating the company is in the safe zone and there is no funny business with accruals.
Outerwall Sloan Ratio % Historical Data
The historical data trend for Outerwall'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 Outerwall's Sloan Ratio %
For the Specialty Retail subindustry, Outerwall'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.
Outerwall's Sloan Ratio % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Outerwall's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Outerwall's Sloan Ratio % falls into.
Outerwall 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.
Outerwall's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
Outerwall's Net Income for the trailing twelve months (TTM) ended in Jun. 2016 was 37.336 (Sep. 2015 ) + 17.018 (Dec. 2015 ) + 38.451 (Mar. 2016 ) + 40.548 (Jun. 2016 ) = $133 Mil.
Outerwall's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2016 was 85.559 (Sep. 2015 ) + 59.311 (Dec. 2015 ) + 67.205 (Mar. 2016 ) + 75.02 (Jun. 2016 ) = $287 Mil.
Outerwall's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2016 was -19.819 (Sep. 2015 ) + -35.25 (Dec. 2015 ) + -13.379 (Mar. 2016 ) + -14.903 (Jun. 2016 ) = $-83 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.
Outerwall (NAS:OUTR) 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 Jun. 2016, Outerwall has a Sloan Ratio of -5.74%, indicating the company is in the safe zone and there is no funny business with accruals.
Outerwall Sloan Ratio % Related Terms
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Outerwall Inc was incorporated in Delaware on October 12, 1993. The Company is a provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers. The Company's automated retail includes its redbox segment where consumers can rent or purchase movies from self-service kiosks and its Coin segment where consumers can convert their coin to cash or stored value products at coin-counting self-service kiosks. The redbox business faces competition from many other providers, including those using other distribution channels. The coinstar business faces competition from supermarkets, banks and other companies that purchase and operate coin-counting equipment from companies such as ScanCoin, Cummins-Allison Corporation and others. The ecoATM business faces competition from the companies whose primary business consists of the purchase of used electronics, online retailers and web sites such as Gazelle, as well as brick and mortar stores which buy back used electronics. The business of the Company is subject to federal, state, local and foreign laws and government regulation.
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