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.
CIT Group's Sloan Ratio for the quarter that ended in Sep. 2021 was -8.97%.
As of Sep. 2021, CIT Group has a Sloan Ratio of -8.97%, indicating the company is in the safe zone and there is no funny business with accruals.
CIT Group Sloan Ratio % Historical Data
The historical data trend for CIT Group'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 CIT Group's Sloan Ratio %
For the Banks - Regional subindustry, CIT Group'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.
CIT Group's Sloan Ratio % Distribution in the Banks Industry
For the Banks industry and Financial Services sector, CIT Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where CIT Group's Sloan Ratio % falls into.
CIT Group 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.
CIT Group's Sloan Ratio for the fiscal year that ended in Dec. 2020 is calculated as
CIT Group's Net Income for the trailing twelve months (TTM) ended in Sep. 2021 was 8.6 (Dec. 2020 ) + 303.8 (Mar. 2021 ) + 226.9 (Jun. 2021 ) + 175.5 (Sep. 2021 ) = $715 Mil.
CIT Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2021 was 275.9 (Dec. 2020 ) + 274.1 (Mar. 2021 ) + 184.4 (Jun. 2021 ) + 188.8 (Sep. 2021 ) = $923 Mil.
CIT Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2021 was 159.4 (Dec. 2020 ) + 3154.5 (Mar. 2021 ) + 1148.9 (Jun. 2021 ) + 209.5 (Sep. 2021 ) = $4,672 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.
CIT Group (NYSE:CIT) 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 Sep. 2021, CIT Group has a Sloan Ratio of -8.97%, indicating the company is in the safe zone and there is no funny business with accruals.
CIT Group Sloan Ratio % Related Terms
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CIT Group Inc is a banking holding company and a financial holding company operating primarily in North America. It provides financing, leasing, and advisory services primarily to middle-market companies in a diverse group of industries. The company's banking subsidiary mostly operates in Southern California and offers both commercial and retail banking services. The company sources its commercial lending business through direct marketing to customers, vendors, and distributors, among other parties. The company generates revenue by earning interest on loans and investments, as well as commission, fees, and rental income on leased equipment and other financial services. The company also syndicates and sells finance receivables.
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