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.
Largan Precision Co's Sloan Ratio for the quarter that ended in Dec. 2023 was 5.56%.
As of Dec. 2023, Largan Precision Co has a Sloan Ratio of 5.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Largan Precision Co Sloan Ratio % Historical Data
The historical data trend for Largan Precision Co'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 Largan Precision Co's Sloan Ratio %
For the Electronic Components subindustry, Largan Precision 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.
Largan Precision Co's Sloan Ratio % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Largan Precision Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Largan Precision Co's Sloan Ratio % falls into.
Largan Precision 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.
Largan Precision Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Largan Precision Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 3288.948 (Mar. 2023 ) + 3695.973 (Jun. 2023 ) + 5952.52 (Sep. 2023 ) + 4964.881 (Dec. 2023 ) = NT$17,902 Mil.
Largan Precision Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 4255.893 (Mar. 2023 ) + 3854.435 (Jun. 2023 ) + 3883.176 (Sep. 2023 ) + 6205.059 (Dec. 2023 ) = NT$18,199 Mil.
Largan Precision Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -2199.263 (Mar. 2023 ) + -3176.801 (Jun. 2023 ) + -3771.207 (Sep. 2023 ) + -2003.755 (Dec. 2023 ) = NT$-11,151 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.
Largan Precision Co (TPE:3008) 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. 2023, Largan Precision Co has a Sloan Ratio of 5.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Largan Precision Co Sloan Ratio % Related Terms
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Largan Precision Co (TPE:3008) Business Description
Largan Precision is the leader in optical lens technology and the world's largest handset lensmaker by value. The company boasts almost 30 years of experience in the production of optical lenses, namely, plastic aspherical lenses, which are widely used to manufacture smartphone cameras. It is a major supplier of high-end handset camera lenses to global smartphone brands such as Apple and Samsung. The firm also produces optical lenses for various applications such as for automobiles, digital cameras, and extended reality headsets. Largan was co-founded in 1987 by Scott Lin, whose sons Lin En Ping and Lin En Zhou serve as the current CEO and Chairman, respectively. Largan is headquartered and mainly operates in Taichung City, Taiwan and employs 7,704 people as of 2023.
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