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.
Summit Materials's Sloan Ratio for the quarter that ended in Dec. 2023 was 5.19%.
As of Dec. 2023, Summit Materials has a Sloan Ratio of 5.19%, indicating the company is in the safe zone and there is no funny business with accruals.
Summit Materials Sloan Ratio % Historical Data
The historical data trend for Summit Materials'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 Summit Materials's Sloan Ratio %
For the Building Materials subindustry, Summit Materials'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.
Summit Materials's Sloan Ratio % Distribution in the Building Materials Industry
For the Building Materials industry and Basic Materials sector, Summit Materials's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Summit Materials's Sloan Ratio % falls into.
Summit Materials 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.
Summit Materials's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Summit Materials's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was -30.804 (Mar. 2023 ) + 83.637 (Jun. 2023 ) + 230.045 (Sep. 2023 ) + 2.978 (Dec. 2023 ) = $286 Mil.
Summit Materials's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 0.335 (Mar. 2023 ) + 93.707 (Jun. 2023 ) + 149.582 (Sep. 2023 ) + 195.236 (Dec. 2023 ) = $439 Mil.
Summit Materials's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -118.329 (Mar. 2023 ) + -242.322 (Jun. 2023 ) + -54.881 (Sep. 2023 ) + -4.732 (Dec. 2023 ) = $-420 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.
Summit Materials (NYSE:SUM) 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, Summit Materials has a Sloan Ratio of 5.19%, indicating the company is in the safe zone and there is no funny business with accruals.
Summit Materials Sloan Ratio % Related Terms
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Summit Materials (Summit Materials) Business Description
Summit Materials Inc is an aggregates supplier and cement producer in the United States. The company sells products that include aggregates, which it supplies across the United States, and in British Columbia, Canada, and cement, which it supplies to surrounding states along the Mississippi River from Minnesota to Louisiana. In addition to supplying aggregates to customers, the company uses a portion of its materials internally to produce ready-mix concrete and asphalt paving mix, which may be sold externally or used in its paving and related services businesses. The company operates in 22 U.S. states and in British Columbia, Canada and has assets in 21 U.S. states and in British Columbia, Canada through their platforms.
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