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.
Korean Air Lines Co's Sloan Ratio for the quarter that ended in Dec. 2023 was -2.04%.
As of Dec. 2023, Korean Air Lines Co has a Sloan Ratio of -2.04%, indicating the company is in the safe zone and there is no funny business with accruals.
Korean Air Lines Co Sloan Ratio % Historical Data
The historical data trend for Korean Air Lines Co'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 Korean Air Lines Co's Sloan Ratio %
For the Airlines subindustry, Korean Air Lines Co'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.
Korean Air Lines Co's Sloan Ratio % Distribution in the Transportation Industry
For the Transportation industry and Industrials sector, Korean Air Lines Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Korean Air Lines Co's Sloan Ratio % falls into.
Korean Air Lines Co 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.
Korean Air Lines Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Korean Air Lines Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 233838.168 (Mar. 2023 ) + 354434.085 (Jun. 2023 ) + 406704.573 (Sep. 2023 ) + 66188.464 (Dec. 2023 ) = ₩1,061,165 Mil.
Korean Air Lines Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 1153048.904 (Mar. 2023 ) + 1046306.479 (Jun. 2023 ) + 962316.127 (Sep. 2023 ) + 930793.091 (Dec. 2023 ) = ₩4,092,465 Mil.
Korean Air Lines Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -600056.268 (Mar. 2023 ) + -757973.749 (Jun. 2023 ) + -569919.514 (Sep. 2023 ) + -481984.283 (Dec. 2023 ) = ₩-2,409,934 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.
Korean Air Lines Co (XKRX:003490) 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, Korean Air Lines Co has a Sloan Ratio of -2.04%, indicating the company is in the safe zone and there is no funny business with accruals.
Korean Air Lines Co Sloan Ratio % Related Terms
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Korean Air Lines Co (XKRX:003490) Business Description
Korean Air Lines Co Ltd is an airline operator with a global reach. The company has four operating segments: Air transport (majority of total revenues), Aerospace (maintenance and repairs), In-flight meals, and Hotel/limousine and others. Passenger tickets can be bought on the company's website or at the airport counter. Multiple options related to passenger class or cabin experience, baggage fees, and other services are offered to customers. Revenues derived from Republic of Korea account for approximately one-fourth of total revenues, with the remainder coming from international operations. The company has created an alliance with global carriers to help connect flights, and give passengers better options to travel.
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