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.
Bed Bath & Beyond's Sloan Ratio for the quarter that ended in Feb. 2023 was -99.28%.
Warning Sign:
When sloan ratio (-99.28)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Feb. 2023, Bed Bath & Beyond has a Sloan Ratio of -99.28%, indicating earnings are more likely to be made up of accruals.
Bed Bath & Beyond Sloan Ratio % Historical Data
The historical data trend for Bed Bath & Beyond'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 Bed Bath & Beyond's Sloan Ratio %
For the Specialty Retail subindustry, Bed Bath & Beyond'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.
Bed Bath & Beyond's Sloan Ratio % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Bed Bath & Beyond's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Bed Bath & Beyond's Sloan Ratio % falls into.
Bed Bath & Beyond 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.
Bed Bath & Beyond's Sloan Ratio for the fiscal year that ended in Feb. 2023 is calculated as
Bed Bath & Beyond's Net Income for the trailing twelve months (TTM) ended in Feb. 2023 was -357.666 (May. 2022 ) + -366.159 (Aug. 2022 ) + -392.966 (Nov. 2022 ) + -2382.01 (Feb. 2023 ) = $-3,499 Mil.
Bed Bath & Beyond's Cash Flow from Operations for the trailing twelve months (TTM) ended in Feb. 2023 was -383.551 (May. 2022 ) + -198.874 (Aug. 2022 ) + -307.588 (Nov. 2022 ) + -100.966 (Feb. 2023 ) = $-991 Mil.
Bed Bath & Beyond's Cash Flow from Investing for the trailing twelve months (TTM) ended in Feb. 2023 was -104.852 (May. 2022 ) + -121.648 (Aug. 2022 ) + -95.594 (Nov. 2022 ) + 23.359 (Feb. 2023 ) = $-299 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.
Bed Bath & Beyond (OTCPK:BBBYQ) 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 Feb. 2023, Bed Bath & Beyond has a Sloan Ratio of -99.28%, indicating earnings are more likely to be made up of accruals.
Bed Bath & Beyond Sloan Ratio % Related Terms
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Bed Bath & Beyond (Bed Bath & Beyond) Business Description
Bed Bath & Beyond Inc is a specialty home retailer in the U.S that sells a wide assortment of domestic merchandise and home furnishings, the assortment of branded bed and bath accessories, kitchen textiles, and cooking supplies the firm has divested the online retailer Personalizationmall.com, One Kings Lane, Christmas Tree Shops and That (gifts/housewares), Linen Holdings, and Cost Plus World Market in recent years.
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