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 Motors Co's Sloan Ratio for the quarter that ended in Dec. 2023 was 1.41%.
As of Dec. 2023, General Motors Co has a Sloan Ratio of 1.41%, indicating the company is in the safe zone and there is no funny business with accruals.
General Motors Co Sloan Ratio % Historical Data
The historical data trend for General Motors 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.
Competitive Comparison of General Motors Co's Sloan Ratio %
For the Auto Manufacturers subindustry, General Motors 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 Motors Co's Sloan Ratio % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, General Motors Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where General Motors Co's Sloan Ratio % falls into.
General Motors 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 Motors Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
General Motors Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 2395 (Mar. 2023 ) + 2566 (Jun. 2023 ) + 3064 (Sep. 2023 ) + 2101 (Dec. 2023 ) = $10,126 Mil.
General Motors Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 3086 (Mar. 2023 ) + 7591 (Jun. 2023 ) + 6596 (Sep. 2023 ) + 3657 (Dec. 2023 ) = $20,930 Mil.
General Motors Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -2262 (Mar. 2023 ) + -4562 (Jun. 2023 ) + -5276 (Sep. 2023 ) + -2563 (Dec. 2023 ) = $-14,663 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 Motors Co (NYSE:GM) 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, General Motors Co has a Sloan Ratio of 1.41%, indicating the company is in the safe zone and there is no funny business with accruals.
General Motors Co Sloan Ratio % Related Terms
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General Motors Co (General Motors Co) Business Description
General Motors Co. emerged from the bankruptcy of General Motors Corp. (old GM) in July 2009. GM has eight brands and operates under four segments: GM North America, GM International, Cruise, and GM Financial. The United States now has four brands instead of eight under old GM. The company regained its U.S. market share leader crown in 2022, after losing it to Toyota due to the chip shortage in 2021, with share up 170 basis points to 16.4%, a full percentage point ahead of Toyota. GM's Cruise autonomous vehicle arm has previously done driverless geofenced AV robotaxi services in San Francisco and other cities but stopped in late 2023 after an accident. GM owns over 80% of Cruise. GM Financial became the company's captive finance arm in October 2010 via the purchase of AmeriCredit.
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