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.
General Electric Co's Sloan Ratio for the quarter that ended in Jun. 2023 was 1.76%.
As of Jun. 2023, General Electric Co has a Sloan Ratio of 1.76%, indicating the company is in the safe zone and there is no funny business with accruals.
General Electric Co Sloan Ratio % Historical Data
The historical data trend for General Electric Co'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.
* Premium members only.
General Electric Co Annual Data
Trend
Dec13
Dec14
Dec15
Dec16
Dec17
Dec18
Dec19
Dec20
Dec21
Dec22
Sloan Ratio %
-14.66
-8.56
-5.67
-15.67
-4.24
General Electric Co Quarterly Data
Sep18
Dec18
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
Jun22
Sep22
Dec22
Mar23
Jun23
Sloan Ratio %
-17.41
-18.00
-4.34
0.94
1.76
Competitive Comparison
For the Specialty Industrial Machinery subindustry, General Electric Co'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.
General Electric Co Sloan Ratio % Distribution
For the Industrial Products industry and Industrials sector, General Electric Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where General Electric Co's Sloan Ratio % falls into.
General Electric Co 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.
General Electric Co's Sloan Ratio for the fiscal year that ended in Dec. 2022 is calculated as
General Electric Co's Net Income for the trailing twelve months (TTM) ended in Jun. 2023 was -165 (Sep. 2022 ) + 2222 (Dec. 2022 ) + 7506 (Mar. 2023 ) + 35 (Jun. 2023 ) = $9,598 Mil.
General Electric Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2023 was 1423 (Sep. 2022 ) + 4499 (Dec. 2022 ) + -259 (Mar. 2023 ) + 474 (Jun. 2023 ) = $6,137 Mil.
General Electric Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2023 was 67 (Sep. 2022 ) + 678 (Dec. 2022 ) + -1796 (Mar. 2023 ) + 1635 (Jun. 2023 ) = $584 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.
General Electric Co (NYSE:GE) 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. 2023, General Electric Co has a Sloan Ratio of 1.76%, indicating the company is in the safe zone and there is no funny business with accruals.
General Electric Co Sloan Ratio % Related Terms
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General Electric Co (NYSE:GE) Business Description
GE was formed through the combination of two companies in 1892, including one with historical ties to American inventor Thomas Edison. Today, GE is a global leader in air travel and in the energy transition. The company is known for its differentiated technology and its massive industrial installed base of equipment sprawled throughout the world. That installed base most notably includes aerospace engines, gas and steam turbines, and onshore and offshore wind turbines. GE earns most of its profits on the service revenue of that equipment, which is generally higher-margin. The company is led by former Danaher alumnus Larry Culp, who is leading a multiyear turnaround of the storied conglomerate based on lean principles.
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