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.
Navistar International's Sloan Ratio for the quarter that ended in Apr. 2021 was -3.91%.
As of Apr. 2021, Navistar International has a Sloan Ratio of -3.91%, indicating the company is in the safe zone and there is no funny business with accruals.
Navistar International Sloan Ratio % Historical Data
* 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 Navistar International's Sloan Ratio %
For the Farm & Heavy Construction Machinery subindustry, Navistar International'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.
Navistar International's Sloan Ratio % Distribution in the Farm & Heavy Construction Machinery Industry
For the Farm & Heavy Construction Machinery industry and Industrials sector, Navistar International's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Navistar International's Sloan Ratio % falls into.
Navistar International 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.
Navistar International's Sloan Ratio for the fiscal year that ended in Oct. 2020 is calculated as
Navistar International's Net Income for the trailing twelve months (TTM) ended in Apr. 2021 was -37 (Jul. 2020 ) + -236 (Oct. 2020 ) + -81 (Jan. 2021 ) + 163 (Apr. 2021 ) = $-191 Mil.
Navistar International's Cash Flow from Operations for the trailing twelve months (TTM) ended in Apr. 2021 was 250 (Jul. 2020 ) + 342 (Oct. 2020 ) + -130 (Jan. 2021 ) + 98 (Apr. 2021 ) = $560 Mil.
Navistar International's Cash Flow from Investing for the trailing twelve months (TTM) ended in Apr. 2021 was -78 (Jul. 2020 ) + -50 (Oct. 2020 ) + -101 (Jan. 2021 ) + -245 (Apr. 2021 ) = $-474 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.
Navistar International (NYSE:NAV) 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 Apr. 2021, Navistar International has a Sloan Ratio of -3.91%, indicating the company is in the safe zone and there is no funny business with accruals.
Navistar International Sloan Ratio % Related Terms
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Navistar International (Navistar International) Business Description
Navistar International Corp is a manufacturer of medium & heavy-duty trucks, school buses, military vehicles, and diesel engines. Its operating segments are Truck, which accounts for the majority revenue; Parts; Global Operations; and Financial Services. The company manufactures Class 4 through 8 trucks and buses in the common carrier, private carrier, government, leasing, construction, energy/petroleum, and student and commercial transportation markets under the International and IC brands. Its geographical segments include the United States, Brazil, Mexico, Canada, and others, of which the majority of its revenue comes from the United States.
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