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.
Sika AG's Sloan Ratio for the quarter that ended in Dec. 2023 was 19.48%.
As of Dec. 2023, Sika AG has a Sloan Ratio of 19.48%, indicating there is a warning stage of accrual build up.
Sika AG Sloan Ratio % Historical Data
The historical data trend for Sika AG'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, Sika AG'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.
Sika AG's Sloan Ratio % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, Sika AG's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Sika AG's Sloan Ratio % falls into.
Sika AG 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.
Sika AG's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Sika AG's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 411.1 (Jun. 2023 ) + 650.9 (Dec. 2023 ) = CHF1,062 Mil.
Sika AG's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 433.8 (Jun. 2023 ) + 1211.6 (Dec. 2023 ) = CHF1,645 Mil.
Sika AG's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -3264 (Jun. 2023 ) + -251.5 (Dec. 2023 ) = CHF-3,516 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.
Sika AG (LTS:0Z4C) 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, Sika AG has a Sloan Ratio of 19.48%, indicating there is a warning stage of accrual build up.
Sika AG Sloan Ratio % Related Terms
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Sika AG manufactures and sells specialty chemical-based products. The majority of the company's revenue comes from the construction industry. Sika's products are used mainly for bonding, sealing, damping, reinforcing, and protecting in the building and motor vehicle industries. The firm produces additives for concrete, cement, and mortar production, waterproofing systems, roof waterproofing, flooring solutions, sealants, adhesive tapes, assembly foams and elastic adhesives for facade construction, interior and infrastructure construction, as well as concrete protection and repair solutions. The company's reportable segments are based on geography: EMEA, the Americas; Asia-Pacific; and global business. The EMEA segment generates the majority of revenue.
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