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.
ADF Group's Sloan Ratio for the quarter that ended in Jan. 2024 was -10.34%.
As of Jan. 2024, ADF Group has a Sloan Ratio of -10.34%, indicating there is a warning stage of accrual build up.
ADF Group Sloan Ratio % Historical Data
The historical data trend for ADF 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 ADF Group's Sloan Ratio %
For the Metal Fabrication subindustry, ADF 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.
ADF Group's Sloan Ratio % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, ADF Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where ADF Group's Sloan Ratio % falls into.
ADF 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.
ADF Group's Sloan Ratio for the fiscal year that ended in Jan. 2024 is calculated as
ADF Group's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was 5.371 (Apr. 2023 ) + 10.542 (Jul. 2023 ) + 11.198 (Oct. 2023 ) + 10.511 (Jan. 2024 ) = C$37.6 Mil.
ADF Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 41.226 (Apr. 2023 ) + 9.149 (Jul. 2023 ) + -4.632 (Oct. 2023 ) + 32.117 (Jan. 2024 ) = C$77.9 Mil.
ADF Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was -0.706 (Apr. 2023 ) + -1.017 (Jul. 2023 ) + -3.33 (Oct. 2023 ) + -1.213 (Jan. 2024 ) = C$-6.3 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.
ADF Group (TSX:DRX) 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 Jan. 2024, ADF Group has a Sloan Ratio of -10.34%, indicating there is a warning stage of accrual build up.
ADF Group Sloan Ratio % Related Terms
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ADF Group Inc involves in the design and engineering of connections, fabrication, including industrial coating, and the installation of steel structures and steel built-ups, as well as miscellaneous and architectural metalwork. The company's products and services are intended for the five principal segments of the non-residential construction industry: Office towers and high-rises, Commercial and recreational buildings, Airport facilities, Industrial complexes, and Transport infrastructures. It serves the client base in the non-residential construction industry, such as general contractors, project owners, engineering firms and project architects, and other steel structure fabricators. The company operates in the United States and Canada.
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