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.
Great-West Lifeco's Sloan Ratio for the quarter that ended in Dec. 2023 was -0.20%.
As of Dec. 2023, Great-West Lifeco has a Sloan Ratio of -0.20%, indicating the company is in the safe zone and there is no funny business with accruals.
Great-West Lifeco Sloan Ratio % Historical Data
The historical data trend for Great-West Lifeco'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 Great-West Lifeco's Sloan Ratio %
For the Insurance - Life subindustry, Great-West Lifeco'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.
Great-West Lifeco's Sloan Ratio % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Great-West Lifeco's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Great-West Lifeco's Sloan Ratio % falls into.
Great-West Lifeco 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.
Great-West Lifeco's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Great-West Lifeco's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 627 (Mar. 2023 ) + 531 (Jun. 2023 ) + 937 (Sep. 2023 ) + 897 (Dec. 2023 ) = C$2,992.00 Mil.
Great-West Lifeco's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -1034 (Mar. 2023 ) + 627 (Jun. 2023 ) + 470 (Sep. 2023 ) + 5140 (Dec. 2023 ) = C$5,203.00 Mil.
Great-West Lifeco's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 1136 (Mar. 2023 ) + 1738 (Jun. 2023 ) + 17 (Sep. 2023 ) + -3677 (Dec. 2023 ) = C$-786.00 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.
Great-West Lifeco (TSX:GWO.PR.L.PFD) 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, Great-West Lifeco has a Sloan Ratio of -0.20%, indicating the company is in the safe zone and there is no funny business with accruals.
Great-West Lifeco Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Great-West Lifeco's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Great-West Lifeco (TSX:GWO.PR.L.PFD) Business Description
Great-West Lifeco provides life insurance, health insurance, retirement products, asset management, recordkeeping services, and reinsurance products in Canada, the United States, and Europe. The Canada business contributes approximately 35% of adjusted earnings and has leading market positions in group insurance, group retirement, and individual insurance. The company operates the second-largest recordkeeping business under the Empower brand in the United States, with an earnings contribution from the country approximating 20%. Great-West Lifeco also offers various products across Europe markets with a strong presence in the U.K., Ireland, and Germany. The Europe segment contributes around 28% of adjusted earnings and the reinsurance business accounts for around 17% of adjusted earnings.
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