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.
International Flavors & Fragrances's Sloan Ratio for the quarter that ended in Dec. 2023 was -14.78%.
As of Dec. 2023, International Flavors & Fragrances has a Sloan Ratio of -14.78%, indicating there is a warning stage of accrual build up.
International Flavors & Fragrances Sloan Ratio % Historical Data
The historical data trend for International Flavors & Fragrances'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.
For the Specialty Chemicals subindustry, International Flavors & Fragrances'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.
International Flavors & Fragrances Sloan Ratio % Distribution
For the Chemicals industry and Basic Materials sector, International Flavors & Fragrances's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where International Flavors & Fragrances's Sloan Ratio % falls into.
International Flavors & Fragrances 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.
International Flavors & Fragrances's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
International Flavors & Fragrances's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -9 (Mar. 2023 ) + 27 (Jun. 2023 ) + 25 (Sep. 2023 ) + -2607 (Dec. 2023 ) = $-2,564 Mil.
International Flavors & Fragrances's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 127 (Mar. 2023 ) + 248 (Jun. 2023 ) + 420 (Sep. 2023 ) + 644 (Dec. 2023 ) = $1,439 Mil.
International Flavors & Fragrances's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -167 (Mar. 2023 ) + 719 (Jun. 2023 ) + 86 (Sep. 2023 ) + -64 (Dec. 2023 ) = $574 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.
International Flavors & Fragrances (NYSE:IFF) 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, International Flavors & Fragrances has a Sloan Ratio of -14.78%, indicating there is a warning stage of accrual build up.
International Flavors & Fragrances Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of International Flavors & Fragrances's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
International Flavors & Fragrances (International Flavors & Fragrances) Business Description
International Flavors & Fragrances is the largest specialty ingredients producer globally. The company sells ingredients for the food, beverage, health, household goods, personal care, and pharmaceutical industries. The company makes proprietary formulations, partnering with customers to deliver custom solutions. The nourish segment, which generates roughly half of revenue, is a leading flavor producer and also sell texturants, plant-based proteins, and other ingredients. The health and biosciences business, which generates around one fourth of revenue, is a global leader in probiotics and enzymes. IFF is also one of the leading fragrance producers in the world. The firm also sells pharmaceutical ingredients such as excipients and time-release polymers.
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