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. 2021, National Petrochemical Co has a Sloan Ratio of 1.01%, indicating the company is in the safe zone and there is no funny business with accruals.
National Petrochemical Co 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 National Petrochemical Co's Sloan Ratio %
For the Chemicals subindustry, National Petrochemical 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.
National Petrochemical Co's Sloan Ratio % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, National Petrochemical Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where National Petrochemical Co's Sloan Ratio % falls into.
National Petrochemical Co 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.
National Petrochemical Co's Sloan Ratio for the fiscal year that ended in Dec. 2021 is calculated as
National Petrochemical Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2021 was 310.75 (Mar. 2021 ) + 603.088 (Jun. 2021 ) + 243.788 (Sep. 2021 ) + 209.176 (Dec. 2021 ) = ﷼1,367 Mil.
National Petrochemical Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2021 was 542.577 (Mar. 2021 ) + 790.844 (Jun. 2021 ) + -1265.477 (Sep. 2021 ) + -14.374 (Dec. 2021 ) = ﷼54 Mil.
National Petrochemical Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2021 was -15.825 (Mar. 2021 ) + -12.872 (Jun. 2021 ) + 1174.391 (Sep. 2021 ) + 72.709 (Dec. 2021 ) = ﷼1,218 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.
National Petrochemical Co (SAU:2002) 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. 2021, National Petrochemical Co has a Sloan Ratio of 1.01%, indicating the company is in the safe zone and there is no funny business with accruals.
National Petrochemical Co Sloan Ratio % Related Terms
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National Petrochemical Co (SAU:2002) Business Description
National Petrochemical Co manufactures petrochemical products. Through its subsidiary, Saudi Polymers Company, it develops, produces petrochemical products, and through the Distribution company, it wholesales and retails petrochemical products. Its products include High Density Polyethylene (HDPE), Polypropylene (PP), Polystyrene (PS), and Hexene-1. The company's geographical segments include Domestic/Middle East, Asia, and Europe/Africa.
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