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.
MSCI's Sloan Ratio for the quarter that ended in Mar. 2024 was 13.21%.
As of Mar. 2024, MSCI has a Sloan Ratio of 13.21%, indicating there is a warning stage of accrual build up.
MSCI Sloan Ratio % Historical Data
The historical data trend for MSCI'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 Financial Data & Stock Exchanges subindustry, MSCI'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.
MSCI's Sloan Ratio % Distribution in the Capital Markets Industry
For the Capital Markets industry and Financial Services sector, MSCI's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where MSCI's Sloan Ratio % falls into.
MSCI 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.
MSCI's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
MSCI's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 246.825 (Jun. 2023 ) + 259.659 (Sep. 2023 ) + 403.38 (Dec. 2023 ) + 255.954 (Mar. 2024 ) = $1,166 Mil.
MSCI's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 291.804 (Jun. 2023 ) + 291.131 (Sep. 2023 ) + 388.953 (Dec. 2023 ) + 300.137 (Mar. 2024 ) = $1,272 Mil.
MSCI's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -26.668 (Jun. 2023 ) + -20.981 (Sep. 2023 ) + -749.967 (Dec. 2023 ) + -32.333 (Mar. 2024 ) = $-830 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.
MSCI (NYSE:MSCI) 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, MSCI has a Sloan Ratio of 13.21%, indicating there is a warning stage of accrual build up.
MSCI Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of MSCI's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
MSCI describes its mission as enabling investors to build better portfolios for a better world. MSCI's largest and most profitable segment is its index segment, where it provides benchmarking to asset managers and asset owners. In addition, it boasts over $1.3 trillion in ETF assets linked to MSCI indexes. The MSCI analytics segment provides portfolio management and risk management analytics software to asset managers and asset owners. MSCI's all other segment was broken out into ESG and climate and private assets segments in 2021. In ESG and climate, MSCI provides ESG data to the investment industry. In private assets, MSCI provides real restate reporting, market data, benchmarking, and analytics to investors and real estate managers.
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