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 Jun. 2019, Connecticut Water Service has a Sloan Ratio of 5.08%, indicating the company is in the safe zone and there is no funny business with accruals.
Connecticut Water Service 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 Connecticut Water Service's Sloan Ratio %
For the Utilities - Regulated Water subindustry, Connecticut Water Service'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.
Connecticut Water Service's Sloan Ratio % Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Connecticut Water Service's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Connecticut Water Service's Sloan Ratio % falls into.
Connecticut Water Service 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.
Connecticut Water Service's Sloan Ratio for the fiscal year that ended in Dec. 2018 is calculated as
Connecticut Water Service's Net Income for the trailing twelve months (TTM) ended in Jun. 2019 was 13.663 (Sep. 2018 ) + -0.47 (Dec. 2018 ) + 2.238 (Mar. 2019 ) + 5.786 (Jun. 2019 ) = $21.2 Mil.
Connecticut Water Service's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2019 was 4.159 (Sep. 2018 ) + 16.225 (Dec. 2018 ) + 5.578 (Mar. 2019 ) + 10.252 (Jun. 2019 ) = $36.2 Mil.
Connecticut Water Service's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2019 was -15.855 (Sep. 2018 ) + -18.967 (Dec. 2018 ) + -14.823 (Mar. 2019 ) + -15.201 (Jun. 2019 ) = $-64.8 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.
Connecticut Water Service (NAS:CTWS) 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 Jun. 2019, Connecticut Water Service has a Sloan Ratio of 5.08%, indicating the company is in the safe zone and there is no funny business with accruals.
Connecticut Water Service Sloan Ratio % Related Terms
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Connecticut Water Service (Connecticut Water Service) Business Description
Connecticut Water Service Inc is a water utility that operates in the northeastern region of the United States, specifically Connecticut and Maine. The company has various subsidiaries and divisions, including water operations, which supplies public drinking water; real estate transactions, which sells real estate holdings; and service rentals, which sells contracted water and wastewater services. The major customers of the firm are residential, commercial, fire protection, public authority, and industrial entities. The majority of the company's revenue is derived from its water operations segment and residential customers.
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