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.
Industrivarden AB's Sloan Ratio for the quarter that ended in Sep. 2024 was 16.44%.
As of Sep. 2024, Industrivarden AB has a Sloan Ratio of 16.44%, indicating there is a warning stage of accrual build up.
Industrivarden AB Sloan Ratio % Historical Data
The historical data trend for Industrivarden AB'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 Industrivarden AB's Sloan Ratio %
For the Asset Management subindustry, Industrivarden AB'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.
Industrivarden AB's Sloan Ratio % Distribution in the Asset Management Industry
For the Asset Management industry and Financial Services sector, Industrivarden AB's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Industrivarden AB's Sloan Ratio % falls into.
Industrivarden AB 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.
Industrivarden AB's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Industrivarden AB's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was 1392.003 (Dec. 2023 ) + 1459.798 (Mar. 2024 ) + -653.764 (Jun. 2024 ) + 590.244 (Sep. 2024 ) = €2,788 Mil.
Industrivarden AB's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 0.894 (Dec. 2023 ) + 299.029 (Mar. 2024 ) + 433.185 (Jun. 2024 ) + -4.756 (Sep. 2024 ) = €728 Mil.
Industrivarden AB's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -71.965 (Dec. 2023 ) + -78.38 (Mar. 2024 ) + -109.404 (Jun. 2024 ) + -143.399 (Sep. 2024 ) = €-403 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.
Industrivarden AB (STU:IDVA) 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. 2024, Industrivarden AB has a Sloan Ratio of 16.44%, indicating there is a warning stage of accrual build up.
Industrivarden AB Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Industrivarden AB's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Industrivarden AB is an asset management firm with a long-term, activist orientation. The company's stated investment goal is to increase net asset value and generate returns in excess of the market cost of capital. Industrivarden makes investments in Nordic companies it can influence through corporate governance actions. It benchmarks its performance relative to the average return of the Stockholm Stock Exchange. The firm counts many public and private pension managers, foundations, and retail investors as its client base. Its security selection criteria emphasize enduring business models with promising growth prospects at an attractive valuation.
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