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.
As of Dec. 2023, Standard Motor Products has a Sloan Ratio of -6.53%, indicating the company is in the safe zone and there is no funny business with accruals.
Standard Motor Products Sloan Ratio % Historical Data
* 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 Standard Motor Products's Sloan Ratio %
For the Auto Parts subindustry, Standard Motor Products'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.
Standard Motor Products's Sloan Ratio % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Standard Motor Products's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Standard Motor Products's Sloan Ratio % falls into.
Standard Motor Products 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.
Standard Motor Products's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Standard Motor Products's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 11.918 (Mar. 2023 ) + 9.137 (Jun. 2023 ) + 6.659 (Sep. 2023 ) + 6.434 (Dec. 2023 ) = $34 Mil.
Standard Motor Products's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -20.442 (Mar. 2023 ) + 59.812 (Jun. 2023 ) + 93.523 (Sep. 2023 ) + 11.367 (Dec. 2023 ) = $144 Mil.
Standard Motor Products's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -4.35 (Mar. 2023 ) + -5.091 (Jun. 2023 ) + -5.616 (Sep. 2023 ) + -10.643 (Dec. 2023 ) = $-26 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.
Standard Motor Products (NYSE:SMP) 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, Standard Motor Products has a Sloan Ratio of -6.53%, indicating the company is in the safe zone and there is no funny business with accruals.
Standard Motor Products Sloan Ratio % Related Terms
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Standard Motor Products (Standard Motor Products) Business Description
Standard Motor Products Inc is a manufacturer and distributor of premium automotive parts used in the maintenance, service, and repair of vehicles in the automotive aftermarket industry. It operates into three business segments namely Engineered Solutions, Vehicle Control, and Temperature Control. The company focuses on the original equipment and original equipment services markets, with a product lineup of replacement parts for engine management ignition, emission, and fuel systems, as well as temperature-control products. The company operates majorly in the United States, with additional sales in Canada, Europe, Asia, Mexico, and other Latin American countries.
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