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, Fortune Brands Innovations has a Sloan Ratio of 5.89%, indicating the company is in the safe zone and there is no funny business with accruals.
Fortune Brands Innovations 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 Fortune Brands Innovations's Sloan Ratio %
For the Building Products & Equipment subindustry, Fortune Brands Innovations'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.
Fortune Brands Innovations's Sloan Ratio % Distribution in the Construction Industry
For the Construction industry and Industrials sector, Fortune Brands Innovations's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Fortune Brands Innovations's Sloan Ratio % falls into.
Fortune Brands Innovations 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.
Fortune Brands Innovations's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 84.6 (Mar. 2023 ) + 102.1 (Jun. 2023 ) + 136.5 (Sep. 2023 ) + 81.3 (Dec. 2023 ) = $405 Mil.
Fortune Brands Innovations's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 76.1 (Mar. 2023 ) + 427.5 (Jun. 2023 ) + 332 (Sep. 2023 ) + 220.2 (Dec. 2023 ) = $1,056 Mil.
Fortune Brands Innovations's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -42.6 (Mar. 2023 ) + -848.7 (Jun. 2023 ) + -65.7 (Sep. 2023 ) + -80.8 (Dec. 2023 ) = $-1,038 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.
Fortune Brands Innovations (NYSE:FBIN) 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, Fortune Brands Innovations has a Sloan Ratio of 5.89%, indicating the company is in the safe zone and there is no funny business with accruals.
Fortune Brands Innovations Sloan Ratio % Related Terms
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Fortune Brands Innovations (Fortune Brands Innovations) Business Description
Fortune Brands Innovations is a leading home and security products company that operates two segments. The company's $2.6 billion plumbing segment, led by the Moen brand, sells faucets, showers, and other plumbing fixtures, and the $2.2 billion outdoors and security segment sells entry doors under the Therma-Tru brand name, Fiberon-branded patio decking, and locks and other security devices under the Master Lock and SentrySafe brand names.
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