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.
Keurig Green Mountain's Sloan Ratio for the quarter that ended in Dec. 2015 was -5.32%.
As of Dec. 2015, Keurig Green Mountain has a Sloan Ratio of -5.32%, indicating the company is in the safe zone and there is no funny business with accruals.
Keurig Green Mountain Sloan Ratio % Historical Data
The historical data trend for Keurig Green Mountain'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 Keurig Green Mountain's Sloan Ratio %
For the Packaged Foods subindustry, Keurig Green Mountain'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.
Keurig Green Mountain's Sloan Ratio % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Keurig Green Mountain's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Keurig Green Mountain's Sloan Ratio % falls into.
Keurig Green Mountain 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.
Keurig Green Mountain's Sloan Ratio for the fiscal year that ended in Sep. 2015 is calculated as
Keurig Green Mountain's Net Income for the trailing twelve months (TTM) ended in Dec. 2015 was 155.479 (Mar. 2015 ) + 113.621 (Jun. 2015 ) + 94.596 (Sep. 2015 ) + 104.497 (Dec. 2015 ) = $468 Mil.
Keurig Green Mountain's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2015 was 225.557 (Mar. 2015 ) + 242.137 (Jun. 2015 ) + 144.76 (Sep. 2015 ) + 334.33 (Dec. 2015 ) = $947 Mil.
Keurig Green Mountain's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2015 was -33.897 (Mar. 2015 ) + -103.711 (Jun. 2015 ) + -78.391 (Sep. 2015 ) + -53.423 (Dec. 2015 ) = $-269 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.
Keurig Green Mountain (NAS:GMCR) 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. 2015, Keurig Green Mountain has a Sloan Ratio of -5.32%, indicating the company is in the safe zone and there is no funny business with accruals.
Keurig Green Mountain Sloan Ratio % Related Terms
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Keurig Green Mountain (Keurig Green Mountain) Business Description
Keurig Green Mountain Inc is a Delaware Corporation formed in July 1993. The Company is engaged in the coffee and coffeemaker businesses in the United States and Canada. It sells Keurig Single Cup brewers and roast high-quality Arabica bean coffees including single-origin, Fair Trade Certified, certified organic, flavored, limited edition and proprietary blends offered in K-Cup and Vue packs for use with its Keurig Single Cup brewers. The Company also offers traditional whole bean and ground coffee in other package types including bags, fractional packages and cans. In addition, it produces and sells other specialty beverages in portion packs including hot apple cider, hot and iced teas, iced coffees, iced fruit brews, hot cocoa and other dairy-based beverages. The Company manages its operations through three business segments, the Specialty Coffee business unit (SCBU), the Keurig business unit (KBU) and the Canadian business unit (CBU). Due to this combination, the results of U.S. operations, formerly reported in the SCBU and KBU segments, are reported in the Domestic segment and the results of Canadian operations are in the "Canada" segment. The Domestic segment sells single cup brewers and accessories, and sources, produces and sells coffee, hot cocoa, teas and other beverages in portion packs and coffee in more traditional packaging including bags and fractional packs to retailers including supermarkets, department stores, mass merchandisers, club stores, and convenience stores; to restaurants, hospitality accounts, office coffee distributors, and partner brand owners; and to consumers through Company websites. The Canada segment sells single cup brewers, accessories, and sources, produces and sells coffee, teas and other beverages in portion packs and coffee in more traditional packaging including bags, cans and fractional packs under a variety of brands to retailers including supermarkets, department stores, mass merchandisers, club stores, through office coffee services to offices, convenience stores, restaurants, hospitality accounts, and to consumers through its website. The Company's competitors in the coffee marketplace include large national and international companies and numerous local and regional companies.
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