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.
Ralph Lauren's Sloan Ratio for the quarter that ended in Dec. 2023 was -2.91%.
As of Dec. 2023, Ralph Lauren has a Sloan Ratio of -2.91%, indicating the company is in the safe zone and there is no funny business with accruals.
Ralph Lauren Sloan Ratio % Historical Data
The historical data trend for Ralph Lauren'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 Ralph Lauren's Sloan Ratio %
For the Apparel Manufacturing subindustry, Ralph Lauren'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.
Ralph Lauren's Sloan Ratio % Distribution in the Manufacturing - Apparel & Accessories Industry
For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, Ralph Lauren's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Ralph Lauren's Sloan Ratio % falls into.
Ralph Lauren 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.
Ralph Lauren's Sloan Ratio for the fiscal year that ended in Mar. 2023 is calculated as
Ralph Lauren's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 32.3 (Mar. 2023 ) + 132.1 (Jun. 2023 ) + 146.9 (Sep. 2023 ) + 276.6 (Dec. 2023 ) = $588 Mil.
Ralph Lauren's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 14 (Mar. 2023 ) + 270.7 (Jun. 2023 ) + 72.9 (Sep. 2023 ) + 605.1 (Dec. 2023 ) = $963 Mil.
Ralph Lauren's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 33.3 (Mar. 2023 ) + -77.5 (Jun. 2023 ) + -55.4 (Sep. 2023 ) + -71.3 (Dec. 2023 ) = $-171 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.
Ralph Lauren (NYSE:RL) 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, Ralph Lauren has a Sloan Ratio of -2.91%, indicating the company is in the safe zone and there is no funny business with accruals.
Ralph Lauren Sloan Ratio % Related Terms
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Founded by designer Ralph Lauren in 1967 in New York City, Ralph Lauren Corp. designs, markets, and distributes lifestyle products in North America, Europe, and Asia. Its products include apparel, footwear, eyewear, jewelry, handbags, home goods, and fragrances. The company's brands include Ralph Lauren Collection, Polo Ralph Lauren, and Lauren Ralph Lauren. Distribution channels for Ralph Lauren include wholesale (department stores and specialty stores), retail (company-owned retail stores and e-commerce), and licensing.
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