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.
Bank of America's Sloan Ratio for the quarter that ended in Sep. 2024 was 5.78%.
As of Sep. 2024, Bank of America has a Sloan Ratio of 5.78%, indicating the company is in the safe zone and there is no funny business with accruals.
Bank of America Sloan Ratio % Historical Data
The historical data trend for Bank of America'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 Bank of America's Sloan Ratio %
For the Banks - Diversified subindustry, Bank of America'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.
Bank of America's Sloan Ratio % Distribution in the Banks Industry
For the Banks industry and Financial Services sector, Bank of America's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Bank of America's Sloan Ratio % falls into.
Bank of America 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.
Bank of America's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Bank of America's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was 2883.048 (Dec. 2023 ) + 6140.08 (Mar. 2024 ) + 6407.313 (Jun. 2024 ) + 6213.296 (Sep. 2024 ) = €21,644 Mil.
Bank of America's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 30007.908 (Dec. 2023 ) + -14295.88 (Mar. 2024 ) + 16811.184 (Jun. 2024 ) + -33585.676 (Sep. 2024 ) = €-1,062 Mil.
Bank of America's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -58855.811 (Dec. 2023 ) + -65616.24 (Mar. 2024 ) + -1414.867 (Jun. 2024 ) + -24559.458 (Sep. 2024 ) = €-150,446 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.
Bank of America (WBO:BOAC) 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, Bank of America has a Sloan Ratio of 5.78%, indicating the company is in the safe zone and there is no funny business with accruals.
Bank of America Sloan Ratio % Related Terms
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Bank of America is one of the largest financial institutions in the United States, with more than $3.0 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking, and global markets. Bank of America's consumer-facing lines of business include its network of branches and deposit-gathering operations, retail lending products, credit and debit cards, and small-business services. The company's Merrill Lynch operations provide brokerage and wealth-management services, as does its private bank. Wholesale lines of business include investment banking, corporate and commercial real estate lending, and capital markets operations. Bank of America has operations in several countries but is primarily US-focused.
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