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.
Hargreaves Lansdown's Sloan Ratio for the quarter that ended in Dec. 2023 was -13.03%.
As of Dec. 2023, Hargreaves Lansdown has a Sloan Ratio of -13.03%, indicating there is a warning stage of accrual build up.
Hargreaves Lansdown Sloan Ratio % Historical Data
The historical data trend for Hargreaves Lansdown'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 Hargreaves Lansdown's Sloan Ratio %
For the Asset Management subindustry, Hargreaves Lansdown'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.
Hargreaves Lansdown's Sloan Ratio % Distribution in the Asset Management Industry
For the Asset Management industry and Financial Services sector, Hargreaves Lansdown's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Hargreaves Lansdown's Sloan Ratio % falls into.
Hargreaves Lansdown 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.
Hargreaves Lansdown's Sloan Ratio for the fiscal year that ended in Jun. 2023 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Hargreaves Lansdown's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 166.5 (Jun. 2023 ) + 135.2 (Dec. 2023 ) = £301.7 Mil.
Hargreaves Lansdown's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 134.2 (Jun. 2023 ) + 183.9 (Dec. 2023 ) = £318.1 Mil.
Hargreaves Lansdown's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was 49.6 (Jun. 2023 ) + 96.8 (Dec. 2023 ) = £146.4 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.
Hargreaves Lansdown (LSE:HL.) 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, Hargreaves Lansdown has a Sloan Ratio of -13.03%, indicating there is a warning stage of accrual build up.
Hargreaves Lansdown Sloan Ratio % Related Terms
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Hargreaves Lansdown (LSE:HL.) Business Description
Hargreaves Lansdown PLC operates a large direct-to-investor investment service in the United Kingdom built around offerings tailored to client needs. Clients can elect to hold all their funds, stocks, bonds, ETFs, and other financial instruments in a single service with various tax advantages. The company also offers portfolio rebalancing, discretionary services and managed funds, third-party services, savings management, online and apps offerings, and other retirement solutions. The company's clients mostly comprise individual investors and corporate clients. It primarily earns recurring revenue through the administration and management of assets held under its platform, and secondarily earns transactional revenue through stockbroking commissions and initial advisory fees.
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