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.
ABM Industries's Sloan Ratio for the quarter that ended in Jan. 2024 was 0.12%.
As of Jan. 2024, ABM Industries has a Sloan Ratio of 0.12%, indicating the company is in the safe zone and there is no funny business with accruals.
ABM Industries Sloan Ratio % Historical Data
The historical data trend for ABM Industries'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 ABM Industries's Sloan Ratio %
For the Specialty Business Services subindustry, ABM Industries'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.
ABM Industries's Sloan Ratio % Distribution in the Business Services Industry
For the Business Services industry and Industrials sector, ABM Industries's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where ABM Industries's Sloan Ratio % falls into.
ABM Industries 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.
ABM Industries's Sloan Ratio for the fiscal year that ended in Oct. 2023 is calculated as
ABM Industries's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was 51.9 (Apr. 2023 ) + 98.1 (Jul. 2023 ) + 62.8 (Oct. 2023 ) + 44.7 (Jan. 2024 ) = $258 Mil.
ABM Industries's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 25.9 (Apr. 2023 ) + 149.1 (Jul. 2023 ) + 139.2 (Oct. 2023 ) + -0.1 (Jan. 2024 ) = $314 Mil.
ABM Industries's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was -9.7 (Apr. 2023 ) + -22.8 (Jul. 2023 ) + -17.1 (Oct. 2023 ) + -13.1 (Jan. 2024 ) = $-63 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.
ABM Industries (NYSE:ABM) 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, ABM Industries has a Sloan Ratio of 0.12%, indicating the company is in the safe zone and there is no funny business with accruals.
ABM Industries Sloan Ratio % Related Terms
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ABM Industries (ABM Industries) Business Description
ABM Industries Inc is a provider of integrated facility solutions. It offers its solutions through five segments: Business and Industry, Manufacturing and Distribution, Education, Aviation and Technical solutions. The company derives the majority of its revenue from the business and industry segment, which encompasses janitorial, facilities engineering, and parking services for commercial real estate properties and sports and entertainment venues, as well as vehicle maintenance and other services to rental car providers. The company mainly operates in the United States of America.
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