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 Wuxi Chemical Equipment Co's Sloan Ratio %
For the Specialty Industrial Machinery subindustry, Wuxi Chemical Equipment 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.
Wuxi Chemical Equipment Co's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Wuxi Chemical Equipment Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Wuxi Chemical Equipment Co's Sloan Ratio % falls into.
Wuxi Chemical Equipment 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.
Wuxi Chemical Equipment Co's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 47.407 (Jun. 2023 ) + 26.809 (Sep. 2023 ) + 36.486 (Dec. 2023 ) + 39.159 (Mar. 2024 ) = ¥150 Mil.
Wuxi Chemical Equipment Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 69.585 (Jun. 2023 ) + 197.955 (Sep. 2023 ) + 154.642 (Dec. 2023 ) + -55.114 (Mar. 2024 ) = ¥367 Mil.
Wuxi Chemical Equipment Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was 68.529 (Jun. 2023 ) + 375.932 (Sep. 2023 ) + -43.58 (Dec. 2023 ) + -31.971 (Mar. 2024 ) = ¥369 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.
Wuxi Chemical Equipment Co (SZSE:001332) 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, Wuxi Chemical Equipment Co has a Sloan Ratio of -17.51%, indicating there is a warning stage of accrual build up.
Wuxi Chemical Equipment Co Sloan Ratio % Related Terms
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Wuxi Chemical Equipment Co (SZSE:001332) Business Description
Wuxi Chemical Equipment Co Ltd is engaged in research and development, design, manufacture, sales and related technical services of metal pressure vessels used in petrochemical, fine chemical, natural gas, marines engineering equipment, nuclear power, solar photovoltaic and photothermal power generation.
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