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.
Polaris's Sloan Ratio for the quarter that ended in Mar. 2024 was 2.27%.
As of Mar. 2024, Polaris has a Sloan Ratio of 2.27%, indicating the company is in the safe zone and there is no funny business with accruals.
Polaris Sloan Ratio % Historical Data
The historical data trend for Polaris'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 Recreational Vehicles subindustry, Polaris'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.
Polaris's Sloan Ratio % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Polaris's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Polaris's Sloan Ratio % falls into.
Polaris 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.
Polaris's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Polaris's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was 134.3 (Jun. 2023 ) + 151.7 (Sep. 2023 ) + 103.4 (Dec. 2023 ) + 3.8 (Mar. 2024 ) = $393 Mil.
Polaris's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2024 was 223.7 (Jun. 2023 ) + 28.1 (Sep. 2023 ) + 549.8 (Dec. 2023 ) + -105.4 (Mar. 2024 ) = $696 Mil.
Polaris's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2024 was -101 (Jun. 2023 ) + -155.8 (Sep. 2023 ) + -116.1 (Dec. 2023 ) + -56.7 (Mar. 2024 ) = $-430 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.
Polaris (NYSE:PII) 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, Polaris has a Sloan Ratio of 2.27%, indicating the company is in the safe zone and there is no funny business with accruals.
Polaris Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Polaris's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Polaris designs and manufactures off-road vehicles, including all-terrain vehicles and side-by-side vehicles for recreational and utility purposes, snowmobiles, and on-road vehicles, including motorcycles, along with the related replacement parts, garments, and accessories. The firm entered the marine market after acquiring Boat Holdings in 2018, offering exposure to new segments of the outdoor lifestyle market. Polaris products retailed through more than 2,500 dealers in North America and through 1,500 international dealers as well as more than 25 subsidiaries and 90 distributors in more than 100 countries outside North America at the end of 2022.
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