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.
BHP Group's Sloan Ratio for the quarter that ended in Dec. 2021 was -6.66%.
As of Dec. 2021, BHP Group has a Sloan Ratio of -6.66%, indicating the company is in the safe zone and there is no funny business with accruals.
BHP Group Sloan Ratio % Historical Data
The historical data trend for BHP Group'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 BHP Group's Sloan Ratio %
For the Other Industrial Metals & Mining subindustry, BHP Group'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.
BHP Group's Sloan Ratio % Distribution in the Metals & Mining Industry
For the Metals & Mining industry and Basic Materials sector, BHP Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where BHP Group's Sloan Ratio % falls into.
BHP Group 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.
BHP Group's Sloan Ratio for the fiscal year that ended in Jun. 2021 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
BHP Group's Net Income for the trailing twelve months (TTM) ended in Dec. 2021 was 7428 (Jun. 2021 ) + 9443 (Dec. 2021 ) = $16,871 Mil.
BHP Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2021 was 17865 (Jun. 2021 ) + 13277 (Dec. 2021 ) = $31,142 Mil.
BHP Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2021 was -3636 (Jun. 2021 ) + -3589 (Dec. 2021 ) = $-7,225 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.
BHP Group (NYSE:BBL) 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. 2021, BHP Group has a Sloan Ratio of -6.66%, indicating the company is in the safe zone and there is no funny business with accruals.
BHP Group Sloan Ratio % Related Terms
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BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgical. The merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole and in 2022 voted to reunify the dual listed structure. Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets were sold in 2018 and the remaining Petroleum assets are likely to be spun off and merged with Woodside.
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