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.
Resideo Technologies's Sloan Ratio for the quarter that ended in Dec. 2023 was -2.80%.
As of Dec. 2023, Resideo Technologies has a Sloan Ratio of -2.80%, indicating the company is in the safe zone and there is no funny business with accruals.
Resideo Technologies Sloan Ratio % Historical Data
The historical data trend for Resideo Technologies'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 Resideo Technologies's Sloan Ratio %
For the Security & Protection Services subindustry, Resideo Technologies'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.
Resideo Technologies's Sloan Ratio % Distribution in the Business Services Industry
For the Business Services industry and Industrials sector, Resideo Technologies's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Resideo Technologies's Sloan Ratio % falls into.
Resideo Technologies 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.
Resideo Technologies's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Resideo Technologies's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 57 (Mar. 2023 ) + 50 (Jun. 2023 ) + 21 (Sep. 2023 ) + 82 (Dec. 2023 ) = $210 Mil.
Resideo Technologies's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -4 (Mar. 2023 ) + 121 (Jun. 2023 ) + 60 (Sep. 2023 ) + 263 (Dec. 2023 ) = $440 Mil.
Resideo Technologies's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -26 (Mar. 2023 ) + -29 (Jun. 2023 ) + -35 (Sep. 2023 ) + 46 (Dec. 2023 ) = $-44 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.
Resideo Technologies (NYSE:REZI) 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, Resideo Technologies has a Sloan Ratio of -2.80%, indicating the company is in the safe zone and there is no funny business with accruals.
Resideo Technologies Sloan Ratio % Related Terms
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Resideo Technologies (Resideo Technologies) Business Description
Resideo Technologies Inc is a manufacturer and developer of technology-driven products and components that provide critical comfort, energy management, and safety and security solutions. The company has two reportable segments; Products and Solutions segment offers temperature and humidity control, energy products and solutions, water and air solutions, smoke and carbon monoxide detection home safety products, security panels, sensors, peripherals, wire and cable, communications devices, video cameras, other home-related lifestyle convenience solutions, and ADI Global Distribution segment includes wholesale distributor of low-voltage security products including access control, fire detection, security, and video products. It derives a majority of its revenue from the United States.
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