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.
Air France-KLM's Sloan Ratio for the quarter that ended in Dec. 2023 was 3.05%.
As of Dec. 2023, Air France-KLM has a Sloan Ratio of 3.05%, indicating the company is in the safe zone and there is no funny business with accruals.
Air France-KLM Sloan Ratio % Historical Data
The historical data trend for Air France-KLM'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 Airlines subindustry, Air France-KLM'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.
Air France-KLM Sloan Ratio % Distribution
For the Transportation industry and Industrials sector, Air France-KLM's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Air France-KLM's Sloan Ratio % falls into.
Air France-KLM 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.
Air France-KLM's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Air France-KLM's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -368.308 (Mar. 2023 ) + 654.388 (Jun. 2023 ) + 992.529 (Sep. 2023 ) + -279.171 (Dec. 2023 ) = $999 Mil.
Air France-KLM's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 1659.529 (Mar. 2023 ) + 1404.117 (Jun. 2023 ) + 628.602 (Sep. 2023 ) + -338.059 (Dec. 2023 ) = $3,354 Mil.
Air France-KLM's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -635.974 (Mar. 2023 ) + -696.641 (Jun. 2023 ) + -710.779 (Sep. 2023 ) + -1458.015 (Dec. 2023 ) = $-3,501 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.
Air France-KLM (OTCPK:AFLYY) 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, Air France-KLM has a Sloan Ratio of 3.05%, indicating the company is in the safe zone and there is no funny business with accruals.
Air France-KLM Sloan Ratio % Related Terms
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Air France-KLM (Air France-KLM) Business Description
Air France-KLM is a European airline group engaged in businesses that include passenger and cargo transportation, low-cost operations, and aircraft maintenance. The Group has four segments which include Network, Maintenance, Transavia, and Other. The Network segment derives key revenue which includes the passenger and cargo network, mainly coming from passenger transportation services on scheduled flights with the group's airline code. Its geographic markets include France, Benelux, Europe, and the rest of the world, with the majority of revenue coming from France, including its overseas division.
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