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.
VNET Group's Sloan Ratio for the quarter that ended in Dec. 2023 was -2.62%.
As of Dec. 2023, VNET Group has a Sloan Ratio of -2.62%, indicating the company is in the safe zone and there is no funny business with accruals.
VNET Group Sloan Ratio % Historical Data
The historical data trend for VNET Group'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 VNET Group's Sloan Ratio %
For the Information Technology Services subindustry, VNET Group'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.
VNET Group's Sloan Ratio % Distribution in the Software Industry
For the Software industry and Technology sector, VNET Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where VNET Group's Sloan Ratio % falls into.
VNET Group 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.
VNET Group's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
VNET Group's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 11.942 (Mar. 2023 ) + -32.519 (Jun. 2023 ) + -6.915 (Sep. 2023 ) + -342.118 (Dec. 2023 ) = $-370 Mil.
VNET Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 66.031 (Mar. 2023 ) + 59.133 (Jun. 2023 ) + 62.253 (Sep. 2023 ) + 102.333 (Dec. 2023 ) = $290 Mil.
VNET Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -101.804 (Mar. 2023 ) + -146.83 (Jun. 2023 ) + -102.789 (Sep. 2023 ) + -196.344 (Dec. 2023 ) = $-548 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.
VNET Group (NAS:VNET) 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, VNET Group has a Sloan Ratio of -2.62%, indicating the company is in the safe zone and there is no funny business with accruals.
VNET Group Sloan Ratio % Related Terms
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VNET started as AsiaCloud in 1999 and moved to the data center business with its first self-developed data center opening in 2010. The firm listed (as 21Vianet) on the Nasdaq in April 2011, subsequently changing its name to VNET Group in 2021. It originally focused on providing data center services such as colocation and cloud services to retail clients in China, but added hyperscale customers in 2019 and now counts large Chinese hyperscalers such as Alibaba Cloud, Tencent Cloud, and Huawei Cloud as customers. At end-September 2023 it had 84,608 self-built cabinets with the majority in Beijing, Shanghai, and the Greater Bay area. It also operated partnered data centers with around 4,314 cabinets and had 476 MW of wholesale capacity contracted or under a memorandum of understanding.
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