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.
SolarCity's Sloan Ratio for the quarter that ended in Sep. 2016 was 28.69%.
As of Sep. 2016, SolarCity has a Sloan Ratio of 28.69%, indicating earnings are more likely to be made up of accruals.
SolarCity Sloan Ratio % Historical Data
The historical data trend for SolarCity'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 SolarCity's Sloan Ratio %
For the Utilities - Independent Power Producers subindustry, SolarCity'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.
SolarCity's Sloan Ratio % Distribution in the Utilities - Independent Power Producers Industry
For the Utilities - Independent Power Producers industry and Utilities sector, SolarCity's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where SolarCity's Sloan Ratio % falls into.
SolarCity 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.
SolarCity's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
SolarCity's Net Income for the trailing twelve months (TTM) ended in Sep. 2016 was 4.628 (Dec. 2015 ) + -24.988 (Mar. 2016 ) + -55.489 (Jun. 2016 ) + 53.215 (Sep. 2016 ) = $-22.6 Mil.
SolarCity's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2016 was -263.567 (Dec. 2015 ) + -193.115 (Mar. 2016 ) + -195.896 (Jun. 2016 ) + -36.809 (Sep. 2016 ) = $-689.4 Mil.
SolarCity's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2016 was -525.291 (Dec. 2015 ) + -466.111 (Mar. 2016 ) + -447.162 (Jun. 2016 ) + -385.36 (Sep. 2016 ) = $-1,823.9 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.
SolarCity (NAS:SCTY) 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. 2016, SolarCity has a Sloan Ratio of 28.69%, indicating earnings are more likely to be made up of accruals.
SolarCity Sloan Ratio % Related Terms
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SolarCity Corp was incorporated as a Delaware corporation on June 21, 2006. The Company is engaged in the design, manufacture, installation and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers. Its customers include residential, commercial and government. The residential customers are individual homeowners who want to switch to cleaner, more affordable energy. Residential customers also include homeowners within communities developed by home builders the company is partnered with. The Commercial customers represent diverse business sectors, including technology, retail, manufacturing, agriculture and nonprofits, including customers such as Walmart, eBay, HP, Walgreens, Intel, and Safeway, Mexican businesses such as Tiendas Soriana, and thousands of other businesses across the United States, including SMBs. For government the company has installed solar energy systems for various federal, state and municipal government entities, including the U.S. Air Force, Army, Marines and Navy, the City of Lancaster, the City of San Jose, the City of Sacramento, the Department of Homeland Security and a number of schools and universities. The Company market and sell its products and services through a national sales organization that includes a direct outside sales force, a door-to-door sales force, call centers, a channel partner network and a robust customer referral program. It purchases components such as solar panels and inverters directly from multiple manufacturers. The Company's competitors include Vivint Solar Inc., Sunrun Inc., NRG Home Solar, Sungevity, Inc., Trinity Solar, Verengo, Inc., SunPower Corporation, SunEdison LLC, Borrego Solar Systems, Inc., G&S Solar Installers, Cenergy Power and numerous other companies. The Company's operations are subject to stringent and complex federal, state and local laws and regulations governing the occupational health and safety of its employees, wage regulations and environmental regulations.
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