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.
FirstService's Sloan Ratio for the quarter that ended in Mar. 2024 was 11.26%.
As of Mar. 2024, FirstService has a Sloan Ratio of 11.26%, indicating there is a warning stage of accrual build up.
FirstService Sloan Ratio % Historical Data
The historical data trend for FirstService'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 FirstService's Sloan Ratio %
For the Real Estate Services subindustry, FirstService'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.
FirstService's Sloan Ratio % Distribution in the Real Estate Industry
For the Real Estate industry and Real Estate sector, FirstService's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where FirstService's Sloan Ratio % falls into.
FirstService 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.
FirstService's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
FirstService's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 60.265 (Jun. 2023 ) + 44.18 (Sep. 2023 ) + 8.401 (Dec. 2023 ) + 8.539 (Mar. 2024 ) = C$121 Mil.
FirstService's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 114.594 (Jun. 2023 ) + 113.613 (Sep. 2023 ) + 148.174 (Dec. 2023 ) + -11.912 (Mar. 2024 ) = C$364 Mil.
FirstService's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -36.22 (Jun. 2023 ) + -59.979 (Sep. 2023 ) + -624.654 (Dec. 2023 ) + -77.615 (Mar. 2024 ) = C$-798 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.
FirstService (TSX:FSV) 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, FirstService has a Sloan Ratio of 11.26%, indicating there is a warning stage of accrual build up.
FirstService Sloan Ratio % Related Terms
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FirstService Corp operates in two business divisions: FirstService Residential and FirstService Brands. FirstService Residential has service contracts to manage thousands of residential communities, including high-, medium-, and low-rise condominiums and co-operatives. FirstService Brands generates most of the company's revenue and provides property services to residential and commercial customers through the following brands: California Closets; Paul Davis Restoration; CertPro Painters; Pillar to Post; Floor Coverings International; College Pro Painters; and Service America. The company earns the majority of its revenue in the United States, with the remaining revenue generated in Canada.
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