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.
JD Sports Fashion's Sloan Ratio for the quarter that ended in Jul. 2023 was -7.46%.
As of Jul. 2023, JD Sports Fashion has a Sloan Ratio of -7.46%, indicating the company is in the safe zone and there is no funny business with accruals.
JD Sports Fashion Sloan Ratio % Historical Data
The historical data trend for JD Sports Fashion'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 JD Sports Fashion's Sloan Ratio %
For the Apparel Retail subindustry, JD Sports Fashion'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.
JD Sports Fashion's Sloan Ratio % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, JD Sports Fashion's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where JD Sports Fashion's Sloan Ratio % falls into.
JD Sports Fashion 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.
JD Sports Fashion's Sloan Ratio for the fiscal year that ended in Jan. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
JD Sports Fashion's Net Income for the trailing twelve months (TTM) ended in Jul. 2023 was -42 (Jan. 2023 ) + 239.9 (Jul. 2023 ) = £198 Mil.
JD Sports Fashion's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jul. 2023 was 911.7 (Jan. 2023 ) + 296.7 (Jul. 2023 ) = £1,208 Mil.
JD Sports Fashion's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jul. 2023 was -165.4 (Jan. 2023 ) + -254.3 (Jul. 2023 ) = £-420 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.
JD Sports Fashion (LSE:JD.) 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 Jul. 2023, JD Sports Fashion has a Sloan Ratio of -7.46%, indicating the company is in the safe zone and there is no funny business with accruals.
JD Sports Fashion Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of JD Sports Fashion's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
JD Sports Fashion PLC is a U.K. retailer of branded sportswear and fashionwear. The company has stores in the United Kingdom, mainland Europe, and outside Europe. The offering includes international brands, such as Adidas, Nike and The North Face, and own-brand labels, such as McKenzie, Carbrini, Supply & Demand and The Duffer of St George. The store network consists of various shops: Size?, Footpatrol, Chausport, Sprinter, Scotts, Tessuti, Cloggs, Mainline, and Ultimate Outdoors, among others. Stores are specialized: Footpatrol is a sneaker provider; Size? offers footwear, apparel, and accessories; and Chausport operates throughout France selling international footwear brands, such as Nike.
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