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.
Franchise Group's Sloan Ratio for the quarter that ended in Jun. 2023 was -8.50%.
As of Jun. 2023, Franchise Group has a Sloan Ratio of -8.50%, indicating the company is in the safe zone and there is no funny business with accruals.
Franchise Group Sloan Ratio % Historical Data
The historical data trend for Franchise 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 Franchise Group's Sloan Ratio %
For the Specialty Retail subindustry, Franchise 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.
Franchise Group's Sloan Ratio % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Franchise Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Franchise Group's Sloan Ratio % falls into.
Franchise 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.
Franchise Group's Sloan Ratio for the fiscal year that ended in Dec. 2022 is calculated as
Franchise Group's Net Income for the trailing twelve months (TTM) ended in Jun. 2023 was -121.163 (Sep. 2022 ) + -0.711 (Dec. 2022 ) + -108.317 (Mar. 2023 ) + -50.796 (Jun. 2023 ) = $-281 Mil.
Franchise Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2023 was 4.058 (Sep. 2022 ) + 9.749 (Dec. 2022 ) + 19.687 (Mar. 2023 ) + 18.398 (Jun. 2023 ) = $52 Mil.
Franchise Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2023 was 9.364 (Sep. 2022 ) + -9.581 (Dec. 2022 ) + -16.735 (Mar. 2023 ) + -12.328 (Jun. 2023 ) = $-29 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.
Franchise Group (NAS:FRG) 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 Jun. 2023, Franchise Group has a Sloan Ratio of -8.50%, indicating the company is in the safe zone and there is no funny business with accruals.
Franchise Group Sloan Ratio % Related Terms
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Franchise Group (Franchise Group) Business Description
Franchise Group Inc is a personal services company that provides retail federal and state income tax preparation services and related tax settlement products. The vast majority of these offices operate in the United States under the Liberty Tax Service and SiempreTax+ brand names. Liberty Tax also provides online do-it-yourself tax programs within the U.S. The sale of financial products and tax preparation service fees also contribute to sizable percentages of the company's total income. Liberty Tax also operates a smaller portfolio of wholly-owned company offices. The company's reportable segments are Vitamin Shoppe, Pet Supplies Plus, Badcock, American Freight, Buddy's and Sylvan.
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