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Advance Auto Parts Sloan Ratio %

: 0.03% (As of Sep. 2020)
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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.

Advance Auto Parts's Sloan Ratio for the quarter that ended in Sep. 2020 was 0.03%.

As of Sep. 2020, Advance Auto Parts has a Sloan Ratio of 0.03%, indicating the company is in the safe zone and there is no funny business with accruals.


Advance Auto Parts Sloan Ratio % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Advance Auto Parts Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
Sloan Ratio % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.30 2.39 0.63 -2.16 0.74

Advance Auto Parts Quarterly Data
Dec14 Apr15 Sep15 Dec15 Apr16 Sep16 Dec16 Apr17 Sep17 Dec17 Apr18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20
Sloan Ratio % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.41 0.75 1.66 1.09 0.03

Competitive Comparison
* 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.


Advance Auto Parts Sloan Ratio % Distribution

* The bar in red indicates where Advance Auto Parts's Sloan Ratio % falls into.



Advance Auto Parts 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.

Advance Auto Parts's Sloan Ratio for the fiscal year that ended in Dec. 2019 is calculated as

Sloan Ratio=(Net Income (A: )-Cash Flow from Operations (A: Dec. 2019 )
-Cash Flow from Investing (A: Dec. 2019 ))/Total Assets (A: Dec. 2019 )
=(486.896-866.909
--462.939)/11248.525
=0.74%

Advance Auto Parts's Sloan Ratio for the quarter that ended in Sep. 2020 is calculated as

Sloan Ratio=(Net Income (TTM)-Cash Flow from Operations (TTM})
-Cash Flow from Investing (TTM))/Total Assets (Q: Sep. 2020 )
=(476.931-967.581
--494.377)/11972.763
=0.03%

Advance Auto Parts's Net Income for the trailing twelve months (TTM) ended in Sep. 2020 was 95.907 (Dec. 2019 ) + 43.588 (Mar. 2020 ) + 189.96 (Jun. 2020 ) + 147.476 (Sep. 2020 ) = $477 Mil.
Advance Auto Parts's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2020 was 158.363 (Dec. 2019 ) + 10.908 (Mar. 2020 ) + 437.302 (Jun. 2020 ) + 361.008 (Sep. 2020 ) = $968 Mil.
{{stock_data.stock.company}'s Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2020 was -302.429 (Dec. 2019 ) + -83.132 (Mar. 2020 ) + -56.898 (Jun. 2020 ) + -51.918 (Sep. 2020 ) = $-494 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Advance Auto Parts  (NYSE:AAP) 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.

According to How to Beat the Market with the Sloan Ratio:

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. 2020, Advance Auto Parts has a Sloan Ratio of 0.03%, indicating the company is in the safe zone and there is no funny business with accruals.


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