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.
Stitch Fix's Sloan Ratio for the quarter that ended in Jan. 2024 was -42.15%.
Warning Sign:
When sloan ratio (-47.87)% higher than 25% or lower than -25%, earnings are more likely to be made up of accruals.
As of Jan. 2024, Stitch Fix has a Sloan Ratio of -42.15%, indicating earnings are more likely to be made up of accruals.
Stitch Fix Sloan Ratio % Historical Data
The historical data trend for Stitch Fix'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 Stitch Fix's Sloan Ratio %
For the Apparel Retail subindustry, Stitch Fix'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.
Stitch Fix's Sloan Ratio % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Stitch Fix's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Stitch Fix's Sloan Ratio % falls into.
Stitch Fix 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.
Stitch Fix's Sloan Ratio for the fiscal year that ended in Jul. 2023 is calculated as
Stitch Fix's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was -21.825 (Apr. 2023 ) + -28.659 (Jul. 2023 ) + -35.49 (Oct. 2023 ) + -35.524 (Jan. 2024 ) = $-121 Mil.
Stitch Fix's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 25.682 (Apr. 2023 ) + 21.088 (Jul. 2023 ) + 14.44 (Oct. 2023 ) + -25.487 (Jan. 2024 ) = $36 Mil.
Stitch Fix's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was 32.33 (Apr. 2023 ) + 28.786 (Jul. 2023 ) + 9.188 (Oct. 2023 ) + -0.624 (Jan. 2024 ) = $70 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.
Stitch Fix (NAS:SFIX) 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 Jan. 2024, Stitch Fix has a Sloan Ratio of -42.15%, indicating earnings are more likely to be made up of accruals.
Stitch Fix Sloan Ratio % Related Terms
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Stitch Fix Inc offers personal style services for men and women. The company engages in delivering one-to-one personalization to clients through the combination of data science and human judgment. It provides a shipment service called A FIX where the stylist's hand selects items from several merchandise with analysis of client and merchandise data to provide a personalized shipment of apparel, shoes, and accessories suited to the client's needs. The company offers products across categories, brands, product types, and price points including Women's, Petite, Maternity, Men's, and Plus. It also offers various product types, including denim, dresses, blouses, skirts, shoes, jewelry, and handbags, and sells merchandise across various ranges of price points.
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