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.
* 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 Shanghai Huafon Aluminium's Sloan Ratio %
For the Aluminum subindustry, Shanghai Huafon Aluminium'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.
Shanghai Huafon Aluminium's Sloan Ratio % Distribution in the Metals & Mining Industry
For the Metals & Mining industry and Basic Materials sector, Shanghai Huafon Aluminium's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Shanghai Huafon Aluminium's Sloan Ratio % falls into.
Shanghai Huafon Aluminium 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.
Shanghai Huafon Aluminium's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Shanghai Huafon Aluminium's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 243.526 (Jun. 2023 ) + 250.18 (Sep. 2023 ) + 235.915 (Dec. 2023 ) + 253.596 (Mar. 2024 ) = ¥983 Mil.
Shanghai Huafon Aluminium's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 236.096 (Jun. 2023 ) + -460.192 (Sep. 2023 ) + 221.741 (Dec. 2023 ) + 254.789 (Mar. 2024 ) = ¥252 Mil.
Shanghai Huafon Aluminium's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -15.029 (Jun. 2023 ) + -25.257 (Sep. 2023 ) + 43.116 (Dec. 2023 ) + -53.613 (Mar. 2024 ) = ¥-51 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.
Shanghai Huafon Aluminium (SHSE:601702) 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 Mar. 2024, Shanghai Huafon Aluminium has a Sloan Ratio of 10.57%, indicating there is a warning stage of accrual build up.
Shanghai Huafon Aluminium Sloan Ratio % Related Terms
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Shanghai Huafon Aluminium (SHSE:601702) Business Description
Shanghai Huafon Aluminium Corp is engaged in production and sales of aluminum sheet, strip and foil. The company's products include brazed heat exchangers material; water tanks, heaters, air coolers; condenser; evaporator, heater, oil cooler; and Other Industrial Products Materials. Its products line covers all kinds of alloyed material and specifications which is widely used in the automobile and construction machinery and equipment cooling systems, power station cooling system, micro-channel cooler and all kinds of both commercial and residential air-conditioners. It also processes all kinds of aluminum products processing 1,3,4,5,7 series, which are widely used in transportation construction, food packaging, electronics information industry and other fields.
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