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.
Resources Connection's Sloan Ratio for the quarter that ended in Feb. 2024 was -1.56%.
As of Feb. 2024, Resources Connection has a Sloan Ratio of -1.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Resources Connection Sloan Ratio % Historical Data
The historical data trend for Resources Connection'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 Resources Connection's Sloan Ratio %
For the Consulting Services subindustry, Resources Connection'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.
Resources Connection's Sloan Ratio % Distribution in the Business Services Industry
For the Business Services industry and Industrials sector, Resources Connection's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Resources Connection's Sloan Ratio % falls into.
Resources Connection 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.
Resources Connection's Sloan Ratio for the fiscal year that ended in May. 2023 is calculated as
Resources Connection's Net Income for the trailing twelve months (TTM) ended in Feb. 2024 was 11.768 (May. 2023 ) + 3.117 (Aug. 2023 ) + 4.895 (Nov. 2023 ) + 2.55 (Feb. 2024 ) = $22.3 Mil.
Resources Connection's Cash Flow from Operations for the trailing twelve months (TTM) ended in Feb. 2024 was 17.758 (May. 2023 ) + -2.214 (Aug. 2023 ) + 0.458 (Nov. 2023 ) + 20.51 (Feb. 2024 ) = $36.5 Mil.
Resources Connection's Cash Flow from Investing for the trailing twelve months (TTM) ended in Feb. 2024 was 2.395 (May. 2023 ) + -0.548 (Aug. 2023 ) + -7.552 (Nov. 2023 ) + -0.332 (Feb. 2024 ) = $-6.0 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.
Resources Connection (NAS:RGP) 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 Feb. 2024, Resources Connection has a Sloan Ratio of -1.56%, indicating the company is in the safe zone and there is no funny business with accruals.
Resources Connection Sloan Ratio % Related Terms
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Resources Connection (Resources Connection) Business Description
Resources Connection Inc provides consulting and business initiative support services primarily through its operative subsidiary, Resources Global Professionals. It has two segments RGP ( Resources Global Professionals.) and Other segments. The company offers transformation and improvement, financial reporting and analysis, strategy development, and program and project management services and support. Its clients operate in the accounting, finance, corporate governance, risk and compliance management, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, and legal and regulatory sectors.
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