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.
Penske Automotive Group's Sloan Ratio for the quarter that ended in Dec. 2023 was 3.39%.
As of Dec. 2023, Penske Automotive Group has a Sloan Ratio of 3.39%, indicating the company is in the safe zone and there is no funny business with accruals.
Penske Automotive Group Sloan Ratio % Historical Data
The historical data trend for Penske Automotive 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 Penske Automotive Group's Sloan Ratio %
For the Auto & Truck Dealerships subindustry, Penske Automotive 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.
Penske Automotive Group's Sloan Ratio % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Penske Automotive Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Penske Automotive Group's Sloan Ratio % falls into.
Penske Automotive 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.
Penske Automotive Group's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Penske Automotive Group's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 298.3 (Mar. 2023 ) + 300.8 (Jun. 2023 ) + 263.4 (Sep. 2023 ) + 190.7 (Dec. 2023 ) = $1,053 Mil.
Penske Automotive Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 311.2 (Mar. 2023 ) + 293.3 (Jun. 2023 ) + 417.7 (Sep. 2023 ) + 71.4 (Dec. 2023 ) = $1,094 Mil.
Penske Automotive Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -105.5 (Mar. 2023 ) + -155.9 (Jun. 2023 ) + -200.3 (Sep. 2023 ) + -110.6 (Dec. 2023 ) = $-572 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.
Penske Automotive Group (NYSE:PAG) 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, Penske Automotive Group has a Sloan Ratio of 3.39%, indicating the company is in the safe zone and there is no funny business with accruals.
Penske Automotive Group Sloan Ratio % Related Terms
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Penske Automotive Group (Penske Automotive Group) Business Description
Penske Automotive Group operates in about 20 U.S. states and overseas. It has about 150 U.S. light-vehicle stores including in Puerto Rico as well as 189 franchised dealerships overseas, primarily in the United Kingdom. The company is the second-largest U.S.-based dealership in terms of light-vehicle revenue and sells more than 35 brands, with over 90% of retail automotive revenue coming from luxury and import names. Other services, in addition to new and used vehicles, are parts and repair and finance and insurance. The firm's Premier Truck Group owns 44 truck dealerships selling mostly Freightliner and Western Star brands, and Penske owns 20 CarShop used-vehicle stores in the U.S. and U.K. The company is based in Michigan and was called United Auto Group before changing its name in 2007.
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