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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.
Avalon Advanced Materials (TSX:AVL) 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 May. 2026, Avalon Advanced Materials has a Sloan Ratio of -12.72%, indicating there is a warning stage of accrual build up.
Avalon Advanced Materials Sloan Ratio % Related Terms
Avalon Advanced Materials Sloan Ratio % Historical Data
* 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.
Avalon Advanced Materials Sloan Ratio % Competitor Comparison
For the Other Industrial Metals & Mining subindustry, Avalon Advanced Materials'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.
Avalon Advanced Materials Sloan Ratio % vs Metals & Mining Industry
For the Metals & Mining industry and Basic Materials sector, Avalon Advanced Materials's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Avalon Advanced Materials's Sloan Ratio % falls into.
Avalon Advanced Materials 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.
Avalon Advanced Materials's Sloan Ratio for the fiscal year that ended in Aug. 2025 is calculated as
Avalon Advanced Materials's Net Income for the trailing twelve months (TTM) ended in May. 2026 was -1.025 (Aug. 2025 ) + -1.988 (Nov. 2025 ) + -16.179 (Feb. 2026 ) + -4.118 (May. 2026 ) = C$-23.31 Mil.
Avalon Advanced Materials's Cash Flow from Operations for the trailing twelve months (TTM) ended in May. 2026 was -0.427 (Aug. 2025 ) + -0.699 (Nov. 2025 ) + -3.034 (Feb. 2026 ) + -1.328 (May. 2026 ) = C$-5.49 Mil.
Avalon Advanced Materials's Cash Flow from Investing for the trailing twelve months (TTM) ended in May. 2026 was -0.189 (Aug. 2025 ) + -0.347 (Nov. 2025 ) + -0.545 (Feb. 2026 ) + -0.743 (May. 2026 ) = C$-1.82 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.
Avalon Advanced Materials (TSX:AVL) has a Sloan Ratio % of -12.72% as of May. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Avalon Advanced Materials and its competitors.
Is Avalon Advanced Materials' Sloan Ratio % too high?
Avalon Advanced Materials' current Sloan Ratio % is -12.72%. Overall, Avalon Advanced Materials has a GF Score™ of 66/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Avalon Advanced Materials' Sloan Ratio % compare to competitors?
Avalon Advanced Materials' Sloan Ratio % of -12.72% can be compared against companies in the Metals & Mining industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Metals & Mining company?
A good Sloan Ratio % depends on the Metals & Mining industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Avalon Advanced Materials and its competitors. Avalon Advanced Materials's current Sloan Ratio % is -12.72%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Avalon Advanced Materials stock overvalued right now?
Based on GuruFocus' analysis, Avalon Advanced Materials (TSX:AVL) is currently considered Possible Value Trap. The stock's GF Value™ is C$19.58, compared to a current price of C$4.70 — trading 76% below its estimated fair value. The current Sloan Ratio % is -12.72%. Avalon Advanced Materials' overall GF Score™ is 66/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Avalon Advanced Materials (TSX:AVL), the current Sloan Ratio % is -12.72% as of May. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Avalon Advanced Materials (TSX:AVL) Overvalued in 2026?
Based on GuruFocus' analysis, Avalon Advanced Materials stock appears to be undervalued.
The current stock price of C$4.70 is trading 76% below its estimated GF Value™ of C$19.58.
GuruFocus considers Avalon Advanced Materials to be Possible Value Trap.
Key valuation signals for TSX:AVL:
Sloan Ratio %: -12.72%
GF Value™: C$19.58 vs. price of C$4.70 (76% below fair value)
No single metric tells the full story. See the TSX:AVL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Avalon Advanced Materials Inc is a mineral exploration and development company. It is principally engaged in the acquisition, exploration, evaluation, and development of specialty and critical minerals properties, located principally in Canada. It holds an exploration license within four claims in the East Kemptville area of Yarmouth, Nova Scotia. The company also holds an interest in a mining lease in the Warren Township Anorthosite Project, Nechalacho REE Project, and Net Smelter Returns (NSR) rights in the East Cedartree Gold Property, and the Wolf Mountain Platinum-Palladium Project located near Thunder Bay, Ontario.
66GF Score
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