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.
* 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 Educational Development's Sloan Ratio %
For the Publishing subindustry, Educational Development'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.
Educational Development's Sloan Ratio % Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Educational Development's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Educational Development's Sloan Ratio % falls into.
Educational Development 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.
Educational Development's Sloan Ratio for the fiscal year that ended in Feb. 2023 is calculated as
Educational Development's Net Income for the trailing twelve months (TTM) ended in Nov. 2023 was -1.92 (Feb. 2023 ) + -0.873 (May. 2023 ) + 1.062 (Aug. 2023 ) + 1.972 (Nov. 2023 ) = $0.24 Mil.
Educational Development's Cash Flow from Operations for the trailing twelve months (TTM) ended in Nov. 2023 was -0.645 (Feb. 2023 ) + 1.177 (May. 2023 ) + 3.538 (Aug. 2023 ) + 6.903 (Nov. 2023 ) = $10.97 Mil.
Educational Development's Cash Flow from Investing for the trailing twelve months (TTM) ended in Nov. 2023 was -0.511 (Feb. 2023 ) + -0.301 (May. 2023 ) + -0.17 (Aug. 2023 ) + 4.654 (Nov. 2023 ) = $3.67 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.
Educational Development (NAS:EDUC) 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 Nov. 2023, Educational Development has a Sloan Ratio of -15.08%, indicating there is a warning stage of accrual build up.
Educational Development Sloan Ratio % Related Terms
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Educational Development (Educational Development) Business Description
Educational Development Corp is the United States trade publisher of the line of educational children's books produced in the United Kingdom. Its business activity functions with two reportable segments: Direct Sales Division segment and Publishing Division segment. The Publishing Division segment markets its products to retail accounts, which include the book, school supplies, toy and gift stores and museums, through commissioned sales representatives, trade and specialty wholesalers and an internal telesales group. The Direct Sales Division segment sells their books and products through independent brand partners direct to the customer. It derives a majority of revenue from the Direct sales division segment.
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