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.
As of Dec. 2023, Central Garden & Pet Co has a Sloan Ratio of -4.49%, indicating the company is in the safe zone and there is no funny business with accruals.
Central Garden & Pet Co Sloan Ratio % Historical Data
* 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 Central Garden & Pet Co's Sloan Ratio %
For the Packaged Foods subindustry, Central Garden & Pet Co'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.
Central Garden & Pet Co's Sloan Ratio % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Central Garden & Pet Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Central Garden & Pet Co's Sloan Ratio % falls into.
Central Garden & Pet Co 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.
Central Garden & Pet Co's Sloan Ratio for the fiscal year that ended in Sep. 2023 is calculated as
Central Garden & Pet Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 48.115 (Mar. 2023 ) + 83.126 (Jun. 2023 ) + 2.835 (Sep. 2023 ) + 0.43 (Dec. 2023 ) = $135 Mil.
Central Garden & Pet Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -33.77 (Mar. 2023 ) + 324.638 (Jun. 2023 ) + 154.068 (Sep. 2023 ) + -69.784 (Dec. 2023 ) = $375 Mil.
Central Garden & Pet Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -12.88 (Mar. 2023 ) + -10.622 (Jun. 2023 ) + 6.869 (Sep. 2023 ) + -70.475 (Dec. 2023 ) = $-87 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.
Central Garden & Pet Co (NAS:CENTA) 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. 2023, Central Garden & Pet Co has a Sloan Ratio of -4.49%, indicating the company is in the safe zone and there is no funny business with accruals.
Central Garden & Pet Co Sloan Ratio % Related Terms
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Central Garden & Pet Co (Central Garden & Pet Co) Business Description
Central Garden & Pet Co understands that home is central to life and has nurtured happy and healthy homes for over forty years. The segments of the company are the pet segment and garden segment. The company's trusted products are dedicated to helping lawns grow greener, gardens bloom bigger, pets live healthier and communities grow stronger. Central is home to a portfolio of more than sixty-five brands including Pennington, Nylabone, Kaytee, Amdro, and Aqueon, manufacturing and distribution capabilities, and a passionate, entrepreneurial growth culture. Central Garden and Pet is based in Walnut Creek, California, and has offices across North America and Europe.
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