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.
Prudential Financial's Sloan Ratio for the quarter that ended in Dec. 2023 was 1.12%.
As of Dec. 2023, Prudential Financial has a Sloan Ratio of 1.12%, indicating the company is in the safe zone and there is no funny business with accruals.
Prudential Financial Sloan Ratio % Historical Data
The historical data trend for Prudential Financial'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 Prudential Financial's Sloan Ratio %
For the Insurance - Life subindustry, Prudential Financial'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.
Prudential Financial's Sloan Ratio % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Prudential Financial's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Prudential Financial's Sloan Ratio % falls into.
Prudential Financial 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.
Prudential Financial's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Prudential Financial's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 1462 (Mar. 2023 ) + 511 (Jun. 2023 ) + -802 (Sep. 2023 ) + 1317 (Dec. 2023 ) = $2,488 Mil.
Prudential Financial's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 1343 (Mar. 2023 ) + 1224 (Jun. 2023 ) + 2840 (Sep. 2023 ) + 1103 (Dec. 2023 ) = $6,510 Mil.
Prudential Financial's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -3303 (Mar. 2023 ) + -2840 (Jun. 2023 ) + -2881 (Sep. 2023 ) + -3098 (Dec. 2023 ) = $-12,122 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.
Prudential Financial (NYSE:PRU) 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, Prudential Financial has a Sloan Ratio of 1.12%, indicating the company is in the safe zone and there is no funny business with accruals.
Prudential Financial Sloan Ratio % Related Terms
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Prudential Financial (Prudential Financial) Business Description
Prudential Financial is a large, diversified insurance company offering annuities, life insurance, retirement plan services, and asset management products. While it operates in a number of countries, the vast majority of revenue is generated in the United States and Japan. The company's investment management business, PGIM, contributes approximately 15% of its earnings and has over $1.5 trillion in assets under management. The U.S. businesses are responsible for about 45% of earnings and can be classified into Institutional Retirement Strategies, Individual Retirement Strategies, Group Insurance, Individual Life Insurance, and Assurance IQ. Finally, the international business segment of the company contributes approximately 40% of earnings with a strong market position in Japan.
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