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.
* 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 LMP Automotive Holdings's Sloan Ratio %
For the Auto & Truck Dealerships subindustry, LMP Automotive Holdings'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.
LMP Automotive Holdings's Sloan Ratio % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, LMP Automotive Holdings's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where LMP Automotive Holdings's Sloan Ratio % falls into.
LMP Automotive Holdings 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.
LMP Automotive Holdings's Sloan Ratio for the fiscal year that ended in Dec. 2020 is calculated as
LMP Automotive Holdings's Net Income for the trailing twelve months (TTM) ended in Sep. 2021 was -2.56 (Dec. 2020 ) + -1.669 (Mar. 2021 ) + -1.992 (Jun. 2021 ) + 4.769 (Sep. 2021 ) = $-1.5 Mil.
LMP Automotive Holdings's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2021 was 0.354 (Dec. 2020 ) + -12.221 (Mar. 2021 ) + 23.477 (Jun. 2021 ) + 21.12 (Sep. 2021 ) = $32.7 Mil.
LMP Automotive Holdings's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2021 was 0.842 (Dec. 2020 ) + -140.003 (Mar. 2021 ) + -4.69 (Jun. 2021 ) + 0.258 (Sep. 2021 ) = $-143.6 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.
LMP Automotive Holdings (OTCPK:LMPX) 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 Sep. 2021, LMP Automotive Holdings has a Sloan Ratio of 51.07%, indicating earnings are more likely to be made up of accruals.
LMP Automotive Holdings Sloan Ratio % Related Terms
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LMP Automotive Holdings (LMP Automotive Holdings) Business Description
LMP Automotive Holdings Inc is an e-commerce and facilities-based retail platform for consumers who desire to buy, sell, rent, subscribe for or finance pre-owned and new automobiles. Its business model is described as Buy, Rent or Subscribe, Sell and Repeat. The company offer sales of pre-owned automobiles, and rentals and subscriptions for both pre-owned and new automobiles.
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