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 Dec. 2024, Penske Automotive Group has a Sloan Ratio of 4.64%, indicating the company is in the safe zone and there is no funny business with accruals.
Penske Automotive Group 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 Penske Automotive Group's Sloan Ratio %
For the Auto & Truck Dealerships subindustry, Penske Automotive Group'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.
Penske Automotive Group's Sloan Ratio % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Penske Automotive Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Penske Automotive Group's Sloan Ratio % falls into.
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.
Penske Automotive Group's Sloan Ratio for the fiscal year that ended in Dec. 2024 is calculated as
Penske Automotive Group's Net Income for the trailing twelve months (TTM) ended in Dec. 2024 was 215.2 (Mar. 2024 ) + 241.2 (Jun. 2024 ) + 226.1 (Sep. 2024 ) + 236.4 (Dec. 2024 ) = $919 Mil.
Penske Automotive Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2024 was 456 (Mar. 2024 ) + 235.1 (Jun. 2024 ) + 271 (Sep. 2024 ) + 217.7 (Dec. 2024 ) = $1,180 Mil.
Penske Automotive Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2024 was -352.4 (Mar. 2024 ) + -298.9 (Jun. 2024 ) + -232.2 (Sep. 2024 ) + -153.5 (Dec. 2024 ) = $-1,037 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.
Penske Automotive Group (NYSE:PAG) 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 Dec. 2024, Penske Automotive Group has a Sloan Ratio of 4.64%, indicating the company is in the safe zone and there is no funny business with accruals.
Penske Automotive Group Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Penske Automotive Group's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Penske Automotive Group operates in 19 US states and overseas. It has over 150 US and Puerto Rico light-vehicle stores as well as 210 franchised dealerships overseas, primarily in the United Kingdom but also in Australia, Germany, Italy, and Japan. The company is the third-largest US publicly traded dealership in terms of light-vehicle revenue and sells more than 40 brands, with over 90% of retail automotive revenue coming from luxury and import names. Other segments are service and finance and insurance. The firm's Premier Truck Group owns 45 truck dealerships selling mostly Freightliner and Western Star brands, and Penske owns 16 used-vehicle stores, mostly in the US and UK under the CarShop (US) and Sytner Select (UK) brands. Penske is based in Bloomfield Hills, Michigan.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
PAG has been successfully added to your 