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.
Insteel Industries's Sloan Ratio for the quarter that ended in Mar. 2024 was -7.95%.
As of Mar. 2024, Insteel Industries has a Sloan Ratio of -7.95%, indicating the company is in the safe zone and there is no funny business with accruals.
Insteel Industries Sloan Ratio % Historical Data
The historical data trend for Insteel Industries'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 Insteel Industries's Sloan Ratio %
For the Metal Fabrication subindustry, Insteel Industries'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.
Insteel Industries's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Insteel Industries's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Insteel Industries's Sloan Ratio % falls into.
Insteel Industries 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.
Insteel Industries's Sloan Ratio for the fiscal year that ended in Sep. 2023 is calculated as
Insteel Industries's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 10.565 (Jun. 2023 ) + 5.626 (Sep. 2023 ) + 1.132 (Dec. 2023 ) + 6.939 (Mar. 2024 ) = $24.3 Mil.
Insteel Industries's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 23.755 (Jun. 2023 ) + 38.874 (Sep. 2023 ) + 21.834 (Dec. 2023 ) + 1.377 (Mar. 2024 ) = $85.8 Mil.
Insteel Industries's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -11.26 (Jun. 2023 ) + -4.172 (Sep. 2023 ) + -12.382 (Dec. 2023 ) + -2.204 (Mar. 2024 ) = $-30.0 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.
Insteel Industries (NYSE:IIIN) 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 Mar. 2024, Insteel Industries has a Sloan Ratio of -7.95%, indicating the company is in the safe zone and there is no funny business with accruals.
Insteel Industries Sloan Ratio % Related Terms
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Insteel Industries (Insteel Industries) Business Description
Insteel Industries Inc manufactures steel wire reinforcing products for concrete construction applications. It manufactures and markets PC strand and welded wire reinforcement, including ESM, concrete pipe reinforcement, and standard welded wire reinforcement. The company's products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Its concrete reinforcing products consist of two product lines: PC strand and WWR. Insteel generates its geographical revenue from the United States.
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