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.
Element Solutions's Sloan Ratio for the quarter that ended in Dec. 2023 was 0.70%.
As of Dec. 2023, Element Solutions has a Sloan Ratio of 0.70%, indicating the company is in the safe zone and there is no funny business with accruals.
Element Solutions Sloan Ratio % Historical Data
The historical data trend for Element Solutions'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 Element Solutions's Sloan Ratio %
For the Specialty Chemicals subindustry, Element Solutions'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.
Element Solutions's Sloan Ratio % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, Element Solutions's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Element Solutions's Sloan Ratio % falls into.
Element Solutions 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.
Element Solutions's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Element Solutions's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 42.9 (Mar. 2023 ) + 29.9 (Jun. 2023 ) + -31.8 (Sep. 2023 ) + 77.1 (Dec. 2023 ) = $118 Mil.
Element Solutions's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 53.5 (Mar. 2023 ) + 83.8 (Jun. 2023 ) + 87.4 (Sep. 2023 ) + 108.9 (Dec. 2023 ) = $334 Mil.
Element Solutions's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -11.6 (Mar. 2023 ) + -202.1 (Jun. 2023 ) + -12.5 (Sep. 2023 ) + -24 (Dec. 2023 ) = $-250 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.
Element Solutions (NYSE:ESI) 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, Element Solutions has a Sloan Ratio of 0.70%, indicating the company is in the safe zone and there is no funny business with accruals.
Element Solutions Sloan Ratio % Related Terms
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Element Solutions (Element Solutions) Business Description
Element Solutions Inc is a specialty chemicals company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. The company has two segments which are Electronics and Industrial & Specialty. The Industrial & Specialty segment researches, formulates and sells specialty chemicals and process technologies that enhance surfaces or improve industrial processes in diverse industrial sectors from automotive trim to transcontinental infrastructure and from high-speed printing to high-design faucets. The electronics segment researches, formulates and sells specialty chemicals and material process technologies for all types of electronics hardware, from complex printed circuit board designs to semiconductor packaging.
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