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.
LG Energy Solution's Sloan Ratio for the quarter that ended in Dec. 2024 was 9.84%.
As of Dec. 2024, LG Energy Solution has a Sloan Ratio of 9.84%, indicating the company is in the safe zone and there is no funny business with accruals.
LG Energy Solution Sloan Ratio % Historical Data
The historical data trend for LG Energy Solution'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 LG Energy Solution's Sloan Ratio %
For the Electrical Equipment & Parts subindustry, LG Energy Solution'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.
LG Energy Solution's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, LG Energy Solution's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where LG Energy Solution's Sloan Ratio % falls into.
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.
LG Energy Solution's Sloan Ratio for the fiscal year that ended in Dec. 2024 is calculated as
LG Energy Solution's Net Income for the trailing twelve months (TTM) ended in Dec. 2024 was -464 (Mar. 2024 ) + -471772 (Jun. 2024 ) + 133156 (Sep. 2024 ) + -679661 (Dec. 2024 ) = ₩-1,018,741 Mil.
LG Energy Solution's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2024 was 531069 (Mar. 2024 ) + 835947 (Jun. 2024 ) + 562367 (Sep. 2024 ) + 3182317 (Dec. 2024 ) = ₩5,111,700 Mil.
LG Energy Solution's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2024 was -3464473 (Mar. 2024 ) + -2776376 (Jun. 2024 ) + -3061742 (Sep. 2024 ) + -2762856 (Dec. 2024 ) = ₩-12,065,447 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.
LG Energy Solution (XKRX:373220) 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. 2024, LG Energy Solution has a Sloan Ratio of 9.84%, indicating the company is in the safe zone and there is no funny business with accruals.
LG Energy Solution Sloan Ratio % Related Terms
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LG Energy Solution is the third-largest battery maker for electric vehicles with about 15% global share in 2023, according to SNE Research. The EV battery segment is the largest revenue contributor, which accounted for more than 60% of total revenue in 2023. LGES also manufactures batteries for mobility, mobile phones, laptops, electrical devices, and energy storage systems. The company was spun off from LG Chem's battery division in December 2020 and listed on the Korea Exchange in January 2022. It has global manufacturing facilities in Korea, China, Poland, and the United States. Key customers include General Motors, Tesla, Volkswagen, Hyundai, and Stellantis.
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