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.
Baker Hughes Co's Sloan Ratio for the quarter that ended in Mar. 2024 was -1.90%.
As of Mar. 2024, Baker Hughes Co has a Sloan Ratio of -1.90%, indicating the company is in the safe zone and there is no funny business with accruals.
Baker Hughes Co Sloan Ratio % Historical Data
The historical data trend for Baker Hughes Co'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 Baker Hughes Co's Sloan Ratio %
For the Oil & Gas Equipment & Services subindustry, Baker Hughes Co'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.
Baker Hughes Co's Sloan Ratio % Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Baker Hughes Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Baker Hughes Co's Sloan Ratio % falls into.
Baker Hughes Co 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.
Baker Hughes Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Baker Hughes Co's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 410 (Jun. 2023 ) + 518 (Sep. 2023 ) + 440 (Dec. 2023 ) + 455 (Mar. 2024 ) = $1,823 Mil.
Baker Hughes Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 859 (Jun. 2023 ) + 810 (Sep. 2023 ) + 932 (Dec. 2023 ) + 784 (Mar. 2024 ) = $3,385 Mil.
Baker Hughes Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -185 (Jun. 2023 ) + -89 (Sep. 2023 ) + -314 (Dec. 2023 ) + -269 (Mar. 2024 ) = $-857 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.
Baker Hughes Co (NAS:BKR) 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, Baker Hughes Co has a Sloan Ratio of -1.90%, indicating the company is in the safe zone and there is no funny business with accruals.
Baker Hughes Co Sloan Ratio % Related Terms
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Baker Hughes Co (Baker Hughes Co) Business Description
Baker Hughes is a global leader in oilfield services and oilfield equipment, with particularly strong presences in the artificial lift, specialty chemicals, and completions markets. It maintains modest exposure to offshore oil and gas production. The other half of its business focuses on industrial power generation, process solutions, and industrial asset management, with high exposure to the liquid natural gas market specifically, as well as broader industrials end markets.
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