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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.
The Real Good Food Co's Sloan Ratio for the quarter that ended in Sep. 2023 was 15.28%.
As of Sep. 2023, The Real Good Food Co has a Sloan Ratio of 15.28%, indicating earnings are more likely to be made up of accruals.
The Real Good Food Co (OTCPK:RGFC) 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. 2023, The Real Good Food Co has a Sloan Ratio of 15.28%, indicating earnings are more likely to be made up of accruals.
The Real Good Food Co Sloan Ratio % Related Terms
The Real Good Food Co Sloan Ratio % Historical Data
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The historical data trend for The Real Good Food Co'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.
RGFC vs PLAG, NAII, FARM: Sloan Ratio % Comparison
For the Packaged Foods subindustry, The Real Good Food Co'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.
The Real Good Food Co Sloan Ratio % vs Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, The Real Good Food Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where The Real Good Food Co'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.
The Real Good Food Co's Sloan Ratio for the fiscal year that ended in Dec. 2022 is calculated as
The Real Good Food Co's Net Income for the trailing twelve months (TTM) ended in Sep. 2023 was -2.88 (Dec. 2022 ) + -3.693 (Mar. 2023 ) + -4.173 (Jun. 2023 ) + -4.436 (Sep. 2023 ) = $-15.2 Mil.
The Real Good Food Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2023 was -7.77 (Dec. 2022 ) + -15.943 (Mar. 2023 ) + -10.657 (Jun. 2023 ) + -2.265 (Sep. 2023 ) = $-36.6 Mil.
The Real Good Food Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2023 was 0.012 (Dec. 2022 ) + -0.537 (Mar. 2023 ) + -0.416 (Jun. 2023 ) + -0.787 (Sep. 2023 ) = $-1.7 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.
The Real Good Food Co (RGFC) has a Sloan Ratio % of 15.28% as of Sep. 2023. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on The Real Good Food Co and its competitors.
Is The Real Good Food Co's Sloan Ratio % too high?
The Real Good Food Co's current Sloan Ratio % is 15.28%. Overall, The Real Good Food Co has a GF Score™ of 14/100, reflecting its overall financial health beyond just this single metric.
How does The Real Good Food Co's Sloan Ratio % compare to PLAG and NAII?
The Real Good Food Co's Sloan Ratio % of 15.28% can be compared against companies in the Consumer Packaged Goods 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 Consumer Packaged Goods company?
A good Sloan Ratio % depends on the Consumer Packaged Goods 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 The Real Good Food Co and its competitors. The Real Good Food Co's current Sloan Ratio % is 15.28%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Real Good Food Co stock overvalued right now?
The Real Good Food Co (RGFC) has a current Sloan Ratio % of 15.28%. The current Sloan Ratio % is 15.28%. The Real Good Food Co's overall GF Score™ is 14/100. 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 The Real Good Food Co (RGFC), the current Sloan Ratio % is 15.28% as of Sep. 2023. 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.
The Real Good Food Co Inc is a frozen food company that develops, markets, and manufactures foods high in protein, low in sugar, and gluten- and grain-free. The company produces breakfast sandwiches, entrees, and other products, primarily sold in the U.S. frozen food category. All of its revenue is derived from the United States.
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