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.
Coty's Sloan Ratio for the quarter that ended in Mar. 2024 was -1.15%.
As of Mar. 2024, Coty has a Sloan Ratio of -1.15%, indicating the company is in the safe zone and there is no funny business with accruals.
Coty Sloan Ratio % Historical Data
The historical data trend for Coty'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.
For the Household & Personal Products subindustry, Coty'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.
Coty's Sloan Ratio % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Coty's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Coty's Sloan Ratio % falls into.
Coty 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.
Coty's Sloan Ratio for the fiscal year that ended in Jun. 2023 is calculated as
Coty's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 32.9 (Jun. 2023 ) + 1.6 (Sep. 2023 ) + 180.9 (Dec. 2023 ) + 3.8 (Mar. 2024 ) = $219 Mil.
Coty's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 104.9 (Jun. 2023 ) + 186.2 (Sep. 2023 ) + 421.9 (Dec. 2023 ) + -170 (Mar. 2024 ) = $543 Mil.
Coty's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -20.5 (Jun. 2023 ) + -62.2 (Sep. 2023 ) + -57.2 (Dec. 2023 ) + -42.1 (Mar. 2024 ) = $-182 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.
Coty (NYSE:COTY) 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 Mar. 2024, Coty has a Sloan Ratio of -1.15%, indicating the company is in the safe zone and there is no funny business with accruals.
Coty Sloan Ratio % Related Terms
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Coty is a global beauty maker that focuses on fragrance (59% of sales) and color cosmetics (28%), with limited exposure to skincare (5%) and body care (8%). For its fragrance business, Coty licenses luxury and high-end brands including Gucci, Burberry, Hugo Boss, Davidoff, and Calvin Klein, while its consumer cosmetics business focuses on acquired mass brands such as CoverGirl, Max Factor, Rimmel, Sally Hansen, and Bourjois. It also collaborates with social media celebrities Kim Kardashian and Kylie Jenner to launch makeup products bearing their names. By region, Coty generates close to 45% of sales from Europe, 30% from North America, 10% from Asia, and 8% from Latin America, with the rest from travel retail. German investment firm JAB is a controlling shareholder, with a 53% stake.
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